Municipalities pocketing employees' pensions: Enoch Godongwana

• Finance Minister Enoch Godongwana announced that the National Treasury would withhold equitable share allocations from noncompliant municipalities
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PRETORIA, GAUTENG—The Finance Minister, Enoch Godongwana, said National Treasury would withhold equitable share allocations because municipalities have deducted R1.7 billion from workers' salaries for pensions without paying them over. He spoke after the National Treasury invoked Section 216 of the Constitution to freeze municipal funding due to severe statutory noncompliance.

According to eNCA, Godongwana spoke at a media briefing in Pretoria on 10 July 2026, where he highlighted critical financial failures within local governance. Godongwana condemned the pension fund theft and said that the withholding of R13.5 billion was a corrective measure intended to force local councils to settle their outstanding retirement contributions.

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Enoch Godongwana penalises noncompliant municipalities

Godongwana said that his department would not release the allocations to noncompliant municipalities. He said that municipal employees were severely compromised by their employers' failure to process these retirement fund deductions. The finance minister said the state respects statutory bodies and follows strict financial management laws.

Godongwana said that Treasury is aligned with municipal recovery goals and added that while affected councils approached him and canvassed for his leniency during the implementation process, the department remains resolute in its decision to penalise Johannesburg, Buffalo City, Nelson Mandela Bay, and Mangaung.

He stated that the government wants total accountability but also aims to assist struggling administrations to improve their fiscal processes. The Treasury confirmed the frozen money will be released once municipalities settle these outstanding pension debts and submit acceptable payment plans to creditors.

Eastern Cape municipalities deprived of funds

In a related article, Briefly News reported on the withdrawal of equitable share funding from six municipalities in the Eastern Cape by the National Treasury due to financial mismanagement concerns. The cuts have raised serious questions regarding the future of basic service delivery and salary payments for residents reliant on these local governments.

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Source: Briefly News