Key Takeaways
- The National Treasury has blocked the equitable‑share payment to Nelson Mandela Bay (and 68 other municipalities) to enforce fiscal discipline and address chronic non‑compliance with the Municipal Finance Management Act (MFMA).
- The blockage is ≈ R500 million, one of three annual equitable‑share tranches; funds will be released only after municipalities submit approved plans to reduce Unauthorised, Irregular, Fruitless and Wasteful Expenditure (UIFWE) and establish functional disciplinary boards.
- Nelson Mandela Bay records the highest UIFWE in the country; the Treasury demands a minimum 25 % cut (about R7.5 billion) by 30 September 2026, supported by proof of recovered money and investigation outcomes.
- Opposition parties and civil‑society leaders accuse the ANC‑led coalition of protecting corrupt officials, hiding investigation files, and failing to update the UIFWE register, describing the situation as a “total cover‑up.”
- Municipal Public Accounts Committee (MPAC) chairperson Luxolo Namette says officials, not the committee, are responsible for the lack of reporting, while Deputy Mayor Gary van Niekerk blames Mayor Babalwa Lobishe for distraction and inaction.
- DA councillor Brendon Pegram warns that continued financial mismanagement will further erode service delivery, investor confidence, and employment prospects.
- Several current and former officials face court cases linked to MFMA contraventions, fraud, and defeating the ends of justice, underscoring systemic governance failures.
- Business and political leaders stress that residents deserve competent, ethical leadership that prioritises service delivery over patronage, warning that without reform the metro’s infrastructure and quality of life will continue to deteriorate.
Treasury Blocks Equitable‑Share Payment to Nelson Mandela Bay
On Tuesday morning the National Treasury announced that Nelson Mandela Bay is among 69 municipalities whose equitable‑share transfers will be withheld “to instil fiscal discipline and ensure that public money is properly managed.” The blocked amount is roughly R500 million, representing one of the three annual equitable‑share payments made by the Treasury. The decision follows persistent and serious non‑compliance with the Municipal Finance Management Act (MFMA) despite repeated guidance, engagement, and formal or informal communication from the fiscus.
Scope of the Withholding and Conditions for Release
The Treasury stressed that the measure is corrective rather than punitive, expecting the funding freeze to be short‑term and not to affect service delivery if municipalities meet stipulated conditions. To regain the funds, affected metros must submit proper plans to deal with Unauthorised, Irregular, Fruitless and Wasteful Expenditure (UIFWE) and establish working disciplinary boards. Specifically, a minimum 25 % reduction in UIFWE must be achieved by 30 September 2026, accompanied by proof of recovered money, investigation outcomes, and supporting documentation for any proposed write‑offs. For Nelson Mandela Bay, this translates to a required cut of about R7.5 billion.
Nelson Mandela Bay’s Dire Financial Record
The metro holds the country’s highest UIFWE figure, a symptom of years of mismanagement, weak governance, and failure to adhere to MFMA provisions. Between May 2025 and April 2026 the city logged 2,000 electricity outages and suffered daily, extended water interruptions across large areas. Its own “UIFWE Reduction Strategy” had pledged to write off 10 % of historical debt by 30 June 2026 and to achieve zero new UIFWE from 1 July 2026—promises that, according to critics, have not been fulfilled.
Allegations of Cover‑Up and Political Protection
ACDP councillor Lance Grootboom condemned the ANC‑led coalition for allegedly shielding corrupt officials. He asserted that the administration is deliberately hiding more than R1.1 billion in investigation files from the Municipal Public Accounts Committee (MPAC), keeping them stalled at the Disciplinary Board so council cannot act. Grootboom also pointed out that an approved R1.44‑billion write‑off was “accidentally” omitted from the city’s audited financial books, and that officials responsible for stopping new irregular spending from 1 July have not been named. He described the situation as a “total cover‑up” that exposes deep financial rot and warned that poor communities will suffer further as funds meant for basic services remain blocked.
MPAC Chairperson Shifts Blame to Officials
MPAC chairperson Luxolo Namette rejected any blame on the committee, stating that MPAC cannot be held accountable when officials fail to submit the required reports. Namette said the committee had exhausted all avenues—writing to Mayor Babalwa Lobishe, acting city manager Lonwabo Ngoqo, and council speaker Eugene Johnson—receiving only a response from the speaker, who promised to raise the matter with the mayor but has not followed up. He is preparing a council item to document the administrative hurdles MPAC has faced in addressing UIFWE and to seek a resolution on how to move forward.
Deputy Mayor Accuses Mayor of Distraction
Deputy Executive Mayor Gary van Niekerk asserted that Mayor Babalwa Lobishe is “so distracted with all the things going on around her” that the metro and its residents now risk paying the price for the funding block. While he pledged to do “whatever needs to be done” from his office to avert the crisis, van Niekerk also admitted feeling hampered because his assistance is perceived as interference that makes the mayor look bad. He previously blamed Lobishe for blocking an implementation‑ready turnaround plan targeting 100 priority roads aimed at improving service delivery, highlighting a growing rift within the leadership.
DA Councillor Warns of Escalating Consequences
DA councillor Brendon Pegram expressed deep concern but said he was “definitely not shocked” by the Treasury’s move, noting that months of warnings about financial mismanagement, hesitancy toward consequence management, and neglect of good governance have culminated in this intervention. Pegram warned that continued instability will further erode already‑non‑existent service delivery, damage investor confidence, and jeopardise investment and employment in the metro—a sentiment echoed by the Nelson Mandela Bay Business Chamber.
Ongoing Legal Challenges Highlight Systemic Failures
Several current and former officials face court cases tied to MFMA contraventions, fraud, and defeating the ends of justice. Deputy Mayor van Niekerk is set to return to court later this month on charges that include cyberfraud and a legal bill exceeding R550 000 from 2022. Former housing boss Mvuleni Mapu and former city manager Noxolo Nqwazi are implicated in irregularities surrounding a R24‑million tender for toilets in poorer communities during the Covid‑19 pandemic. These cases underscore a pattern of alleged financial misconduct that has persisted despite repeated interventions from the national treasury.
Political and Business Leaders Call for Ethical Leadership
The Freedom Front Plus Eastern Cape’s councillor Bill Harington argued that political leaders and senior officials who tolerate irregular expenditure or neglect consequence management must accept responsibility for the deterioration of local government. He stressed that public office carries legal and fiduciary duties that cannot be ignored without consequences. Similarly, Nelson Mandela Bay Business Chamber CEO Denise van Huyssteen warned that the metro’s urban decay and regression deter investor confidence, making it difficult for businesses to sustain operations and employment. She called for a shift toward competence, accountability, and service‑delivery‑first governance.
Conclusion: A Call for Decisive Reform
The Treasury’s decision to withhold equitable‑share funds is a stark signal that Nelson Mandela Bay’s financial and governance failures have reached a tipping point. While the blockage is intended as a corrective measure, its success hinges on the metro’s ability to produce credible UIFWE‑reduction plans, establish functional disciplinary boards, and ensure transparent reporting to oversight bodies such as MPAC. Without decisive action from political leadership—particularly the mayor and her administration—the city risks prolonged service‑delivery breakdowns, eroding public trust, and further economic decline. Residents, businesses, and civil society alike are demanding competent, ethical leaders who will prioritize the needs of the community over patronage and restore fiscal discipline to Nelson Mandela Bay.
