Nelson Mandela Bay could lose half a billion in grant funds 

By Anita Dangazele

Nelson Mandela Bay municipality stands to lose more than R500-million in grant funding due to underspending.

The National Treasury has written to the city with its intention to invoke section 18 of the Revenue Act.

The Act makes provision for the National Treasury to stop the transfer or allocation of grant funding to a municipality if it anticipates that the municipality may substantially underspend allocated funding in the 2023/24 financial year.

This comes after it was noted that the city spent less than 40% of its annual budget halfway through its financial year on December 31 2023.

Treasury deputy director-general responsible for intergovernmental relations, Malijeng Ngqaleni wrote to suspended city manager Noxolo Nqwazi on Monday, 12 February.

She said the Treasury would stop the allocation of funds to seven programmes, including the

expanded public works programme and the urban settlement development grant. 

The National Treasury has given the municipality seven days to motivate why the money should not be withheld.

The city was also asked to explain why the expenditure was below 40%; as well as submit a progress report on the approved projects. Ngqaleni said she wants confirmation that the allocated funds are actually committed to specific projects and will be spent by the end of the financial year in June. 

Ngqaleni wants a commitment that the municipality will not request a rollover of funds and a progress report on tenders that are already awarded on funds committed. 

This is not the first time that the National Treasury has withheld funds or threatened to do so during the current 2023/24 financial year.  

In July last year, Finance Minister Enoch Godongwana stopped the transfer of R591-million of the city’s equitable share funding unless certain conditions were met. 

Pictured Above: Finance Minister Enoch Godongwana

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