Treasury moves to take control of CFO appointments in municipalities
Changes will give the National Treasury more power over municipal finances.
The National Treasury in South Africa is implementing significant changes to municipal finances, with the aim of gaining greater control over the appointment of chief financial officers (CFOs) in municipalities. This comes as part of a broader effort to address financial management weaknesses and improve the delivery of basic services in local government.
Finance Minister Enoch Godongwana announced during the medium-term budget policy statement (MTBPS) that the Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA) will undergo amendments to tackle issues such as unauthorised, irregular, and wasteful expenditure, as well as governance failures. The proposed changes to municipal law are set to be introduced two weeks before the local elections on 4 November 2026.
Treasury's intervention is aimed at revitalising financially distressed municipalities and enhancing their capacity to provide essential services. The draft Public Finance Management and Related Laws Amendment Bill (2026) represents the first substantial update to the PFMA since its enactment in 1999. Key changes to the PFMA include the requirement for the Accountant-General to prepare consolidated financial statements for institutions and submit them to the Auditor-General.
Additionally, Treasury will publish financial statistics and aggregations for all levels of government on its website. The bill also empowers the Minister of Finance to impose conditions when authorising fund use in emergencies and mandates the Minister to present multi-year budget projections. On the MFMA front, Treasury plans to expand National Treasury's investigative, oversight, and enforcement capabilities.
This includes requiring municipalities to disclose bank account details to National Treasury and enabling the Treasury to control municipal accounts during periods of national or provincial intervention. These measures are expected to deter councils from adopting unfunded budgets and ensure more credible budget estimates. The ultimate goal of these reforms is to strengthen the integrity of public finance management across all spheres of government in South Africa.
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