South Africa’s National Treasury will withhold funding from Johannesburg and dozens of other municipalities for at least a month over persistent and serious non-compliance with financial management regulations, officials said on Wednesday.
The move comes before local elections on November 4, in which Johannesburg, South Africa’s economic hub and largest municipality, is expected to be among the most hotly contested battlegrounds.
Ogalaletseng Gaarekwe, Treasury’s deputy director general of intergovernmental relations, told a news conference on Wednesday that 3.6 billion rand ($220 million) in funding would be withheld from Johannesburg in July.
She stressed the move did not amount to placing the city under administration.
Around 69 municipalities will have a portion of their funding suspended until September unless they can show they have reduced wasteful expenditure by at least 25%, Treasury officials said.
Finance Minister Enoch Godongwana has repeatedly raised concerns about Johannesburg’s financial management.
In May, the city approved a 97.1 billion rand ($5.98 billion) budget that Treasury said was unfunded because planned spending exceeded realistic revenue projections and included a sharp increase in the municipal wage bill.
Local media have reported that the cash-strapped city has only five and 17 days of cash reserves available.
