Finance Minister Enoch Godongwana reveals major funding adjustments for municipalities
Millions of rand have been re-allocated by the National Treasury for several government projects for the remainder of the 2025/26 financial year.
Finance Minister Enoch Godongwana has published amended allocations and provided information on adjustments to existing allocations to national departments and provinces in the 2025/26 financial year, which ends on March 31 in provincial and national government, and June 30 for municipalities.
He allocated an additional R496 million to the municipal disaster recovery grant (MDRG) to fund the reconstruction and rehabilitation of municipal infrastructure that was damaged by the floods that occurred in the Eastern Cape between March and June 2025.
As part of the urban development financing grant, another R2.1 billion has been provided to strengthen the metro trading services component.
Additionally, the minister announced amendments to the framework of the MDRG to ringfence the additional funds for the reconstruction and rehabilitation of damaged municipal infrastructure.
The framework of the urban development financing grant has been amended to reflect the revised 2025/26 baseline following the additional R2.1bn for metro trading services.
“An amount of R303m is rolled over in the public transport network grant to enable the eThekwini Metropolitan Municipality to proceed with essential work needed to make Corridor 3 of its integrated public transport network operational,” reads Godongwana’s notice published last week.
The Department of Cooperative Governance also requested the National Treasury to intervene regarding the Impendle Local Municipality in KwaZulu-Natal, which has been unable to spend its municipal infrastructure grant and MDRG allocations in line with the grant framework conditions.
“As a result, the remaining funds for the 2025/26 financial year will be reallocated to the uMgungundlovu District Municipality to implement the projects on Impendle’s behalf. In addition, the smart meters grant will be re-gazetted to reallocate funding to municipalities that have demonstrated implementation readiness,” the minister stated.
Godongwana said following assessments which confirmed that only 11 municipalities have complete and approved business plans for the 2025/26 financial year.
According to the National Treasury, the allocations provide for the adjustment to municipalities in the 2025/26 financial year during the mid-year adjustments.
“An adjustment budget provides for unforeseen and unavoidable expenditure; appropriation of monies already announced during the tabling of the annual budget (but not allocated at that stage),” explained the notice.
It added that provision is made for the shifting of funds between and within votes, where a function is transferred and the utilisation of savings and the rollover of unspent funds from the preceding financial year.
It further provides for the stopping and reallocation of funds to municipalities and reallocated to their districts.
