Water, electricity, and road maintenance in 20 KwaZulu-Natal municipalities are at serious risk as National Treasury prepares to cut off funding to councils plagued by poor financial management, unpaid debts, and critical service backlogs.
Finance Minister Enoch Godongwana has formally asked KZN Finance MEC Francois Rodgers to submit a list of municipalities that should face action under Section 216(2) of the Constitution — which allows government to withhold funds from municipalities that fail to meet financial obligations or deliver basic services.
MEC Rodgers has confirmed he will comply.
The move comes after the latest Section 71 fourth-quarter report exposed widespread financial mismanagement across the province. The report shows that while municipalities collectively generated R99.3 billion (98.6% of adjusted budgets), they are drowning in debt and underspending critical infrastructure allocations.
Municipal Meltdown: The Numbers Behind the Problem
- R67.1 billion in unpaid municipal debt
- 84% of that debt is overdue by more than 90 days — mainly owed to Eskom and water boards
- R9.3 billion owed to creditors
- R9.9 billion in infrastructure funding left unspent
- Over R132 million in irregular, fruitless and wasteful expenditure in just six months
“These figures are alarming,” said Marlaine Nair, Chairperson of the CoGTA Portfolio Committee. “On paper, the collection rates look strong — but when R9.9 billion meant for roads, repairs, and essential services goes unspent, the cracks are showing. And residents are feeling it every day.”
She warned that basic services — from electricity to water — are at risk unless urgent reforms are implemented.
Is Your Town on the List?
The KZN Treasury has flagged 20 municipalities for severe financial distress. These include both major urban hubs and smaller rural councils.
District Municipalities:
- Ugu District
- uMgungundlovu District
- uThukela District
- uMzinyathi District
Local Municipalities:
- Newcastle
- eMadlangeni (Utrecht)
- eNdumeni (Dundee)
- uMdoni
- uMzumbe
- uMuziwabantu
- Mpofana
- iMpendle
- Msunduzi
- Mkhambathini
- Richmond
- Okhahlamba
- iNkosi Langalibalele
- Nquthu
- uMsinga
- uMvoti
These municipalities were flagged due to high operating deficits, unpaid creditors, negative cash flow positions, and audit concerns.
What Section 216(2) Means for You
If Section 216(2) is invoked, municipalities could have national funds withheld — including grants meant for electricity, water, housing, or roads — until they comply with financial controls. This would worsen the service delivery crisis already felt by communities.
Furthermore, KZN Finance MEC Francois Rodgers said, “The time for tolerance has passed. Municipalities must improve debt collection, honour their payments to Eskom and water boards, spend infrastructure allocations, and deal decisively with financial misconduct.”
Rodgers confirmed that municipalities are being assessed on key risk factors, including unauthorised or irregular spending, and whether any action has been taken under the MFMA (Municipal Financial Management Act). Five top municipalities alone accounted for R59 million in wasteful expenditure in Q4 2024. Six others exceeded R73 million in Q1 2025.
Who’s Helping, and What Happens Next?
Despite the severity of the problem, support measures are in place. The KZN Treasury — in partnership with National Treasury and CoGTA — has deployed financial experts, launched training programmes, and introduced debt recovery plans to help stabilise local governments.
This includes:
- Audit support and training
- Revenue enhancement strategies
- Debt relief initiatives
- Closer financial oversight
For residents, however, the future depends on whether their municipalities act. Services like water and electricity remain vulnerable as debt grows and infrastructure projects stall.
“The frontline of government is your municipality,” Nair reminded officials. “And the people on the ground cannot wait any longer for excuses. They need action.”
With this in mind, what are your thoughts? Let us know below.
Be sure to read, 5 Awesome Northern KwaZulu-Natal Getaways, if you missed it.
4 Responses
This is shocking get trained staffing to do a better job this is unacceptable where is our money going
What financial system do these municipalities use to send out their account?
We are in serious trouble. Everything is just a mess and it will get worse before it gets worse!!
This situation is no surprise to any of us. We have been complaining for the last 10 years, without any feedback. So, we formed a Rates Dispute group, who notifies Umdoni municipality quarterly, with a list of members names and they outline our grievances. Despite all of this, they have not met with us. When a meeting is scheduled, they find an excuse to postpone. I have been withholding my rates now for almost 5 years. Also, our infrastructure in Pennington is totally neglected. Our roads are badly pot holes, storm water drains are blocked , washed away sections of road has not been repaired since the first floods. Residents have to go around the block to get to their house. You cannot phone Umdoni municipality, because nobody answers the phone. Our newest municipal offices are a disgrace. No maintenance and the yard is a scrapyard of vehicles. Most of which should be still be in operation, but they are not, due to parts been stolen, batteries in particular. Their huge photocopier is out of action and has been for ages. I had to go into town to an architect office to have copies made of my house plans. They couldn’t make copies. The licensing office are very arrogant. For the first time ever I’ve had to go and pay for copies of my ID at a private business which I believe is a corrupt operation. It is the same person who is making the new number plates. Apparently, as I was told by a staff member, these were the managers instructions. No more photo copies to be done by the licence department in Scottburgh. We get charged R5 a copy, and R5 for proof of residence. I think this is a scam.
Our Scottburgh Town hall is now a squatter camp. Families are living in the Town hall . So, when a meeting is held, they now use rate payers money to hire a venue for their meetings. The list is long. Someone needs to investigate.