Finance Minister Enoch Godongwana has endorsed the National Treasury's decision to withhold R13.5bn from 69 non-compliant municipalities, redirecting funds directly to Eskom, water boards, and statutory bodies to ensure essential services like electricity and water.The move, under Section 216(2) of the constitution, aims to enforce fiscal discipline and protect public funds.Municipalities that demonstrate compliance will have their transfers reinstated.Godongwana highlighted systemic issues such as unfunded budgets, irregular expenditure, and poor governance as key reasons for the withholding.Johannesburg mayor Dada Morero confirmed the city will pay R1.4bn to Eskom and R160m to Rand Water by mid-July.The Treasury emphasized this is a corrective measure, not punitive, to restore accountability and service delivery.

Over R24bn in fruitless expenditure and R145bn in irregular spending since 2021-2022 has exacerbated the crisis, with 116 municipalities adopting unfunded budgets in 2024-2025.The intervention is part of broader efforts to stabilize local government finances.