CAPE TOWN, Western Cape — The National Treasury is facing intense scrutiny in Parliament today over two critical issues: how South Africa tracks illicit money flows and how the government spends billions on municipal services. As lawmakers demand accountability, National Treasury and Financial Intelligence Center representatives are defending new legislative measures aimed at strengthening the country’s fight against money laundering and terrorist financing, while also addressing persistent challenges in local service delivery.
Treasury and Financial Intelligence Center officials outlined proposed laws that would grant wider powers to access information and investigate suspicious wealth. A primary concern driving these regulatory amendments is ensuring South Africa does not return to the Financial Action Task Force (FATF) grey list, following its initial inclusion in 2023, with another comprehensive review scheduled for next year.
Over the past two years, the National Treasury and financial services regulatory authorities have worked to strengthen oversight frameworks. Key focus areas detailed by officials include preventing nonprofit organizations from receiving terrorism-related funding, conducting more thorough lifestyle audits for government departments and public-facing executives, and amending the Companies Act to better track corporate funding flows.
Union representatives present at the briefing noted that while some institutional submissions highlighted overlapping regulatory roles that may not require further amendments, the immediate priority is fast-tracking the implementation of existing recommendations. These stakeholders urged that measures be solidified by March or April of next year to safeguard South Africa’s financial standing and prevent a return to the grey list.
On the second front, the parliamentary briefing addressed conditional grants allocated to provinces and municipalities for essential infrastructure, including water, roads, and housing. This session had been postponed earlier in the month after the National Treasury submitted its presentation late, with the fourth-quarter spending report still being finalized. Consequently, officials presented third-quarter data for the 2025/26 financial year, alongside new allocations for the 2026/27 financial year that commenced in July.
While National Treasury representatives painted a positive picture regarding improvements in municipalities actively spending their conditional grants, Members of Parliament (MPs) raised significant concerns. Lawmakers highlighted recurring obstacles, including chronic underspending—a critical issue since unspent conditional grant funds must be returned to the national kitty. Additional challenges cited by officials included compliance failures and inefficient contract management.
Highlighting the Eastern Cape’s human settlements development grant for the 2025/26 financial year, data revealed that of the 3.231 billion allocated in the first quarter, only 24.4% of the funds had been directed toward projects.
In response, MPs urged the National Treasury to look beyond mere expenditure metrics and assess the actual quality of service delivery. Lawmakers emphasized the need for stringent compliance measures throughout the procurement process, including the intentional and verified inclusion of small businesses. A prevailing concern raised during the session is that funds earmarked for critical municipal services like roads and electricity are instead being absorbed by salary budgets, leaving communities without tangible, on-the-ground improvements where they are needed most.