South Africa: Select Committee on Appropriations Urges Responsible Use of Municipal Conditional Grants

The Select Committee on Appropriations says a municipality’s performance should be measured not only by the proportion of grant funding spent, but also by timely project completion, functioning infrastructure and measurable improvements in basic services for communities.

The Select Committee on Appropriations received a briefing today from the Phokwane Local Municipality on its municipal conditional grant performance for the first and fourth quarters. Phokwane is a category B local municipality within the ZF Mgcawu/Frances Baard region of the Northern Cape.

As part of its in-year monitoring of municipal conditional grants, the committee is assessing not only expenditure performance but also whether appropriated resources translate into completed infrastructure, improved service delivery and sustainable municipal capacity.

The committee Chairperson, Ms Tidimalo Legwase, said reviewing provincial and municipal conditional grant spending does not supersede their executive functions, nor does it replace oversight by provincial legislatures and municipal councils. She explained that the committee tracks funds allocated through the national budget to assess whether these funds are used as intended and deliver services to communities.

Phokwane received a Municipal Infrastructure Grant (MIG) allocation of R23.427 million in 2025/26 but spent only R16.782 million, or approximately 72 per cent. The municipality attributed the underspending to delays in site occupation while the municipality and the contractor discussed the terms and conditions of appointment. The committee acknowledged that Phokwane is experiencing problems with ageing infrastructure, significant backlogs, low revenue collection, substantial debt to Eskom and low revenue collection abilities.

However, the committee noted that 72% expenditure on the Municipal Infrastructure Grant is not performance. Furthermore, Parliament will no longer accept reports that claim 100% per project while communities still live with raw sewage, gravel roads and no water.

“Section 195 of the Constitution says public resources must be used efficiently, economically and effectively. Spending 72% is not efficient. Building a pump station at 95% for two years is not effective. Claiming 100% progress while Sakhile, a residential area, floods is not accountable. This committee is not here to sympathise with ageing infrastructure – we are here to ensure that every rand appropriated by Parliament delivers a tap that runs, a toilet that flushes and a street that is passable. If Phokwane cannot spend, we will recommend that Treasury gives the money to a municipality that can,” said Ms Legwase.

Ms Legwase also noted that section 4(4) of the Money Bills Amendment Procedure and Related Matters Act requires committees to consider and report on spending matters and actual expenditure. She explained that the committee’s in-year monitoring therefore drew on several sources, including reports under section 32 of the Public Finance Management Act and section 71 of the Municipal Finance Management Act, which include information on conditional grant performance.

Ms Legwase concluded that the committee is concerned, not just with whether public funds have been spent, but whether that spending has achieved its intended outcomes. She emphasised that public resources must deliver functioning infrastructure, sustainable institutions and tangible improvements in service delivery.

Distributed by APO Group on behalf of Republic of South Africa: The Parliament.