CFO reinstatement reversal at Matlosana Municipality sparks administration fears

The Matlosana Local Municipality has reversed its controversial decision to reinstate dismissed Chief Financial Officer Mercy Phetla, leaving the municipality without a permanent CFO and heightening uncertainty over its governance and political future.

Council voted to rescind the resolution that sought to bring Phetla back into office, according to an insider with direct knowledge of the proceedings. The decision means the municipality must now appoint an acting CFO, while Phetla’s dismissal remains in effect unless she successfully challenges it through a formal legal appeal process.

The reversal comes against the backdrop of the ANC in North West calling for the municipality to be placed under provincial administration in terms of Section 139(1)(b) of the Constitution. If implemented, the intervention would allow the provincial government to assume executive authority over Matlosana.

“This has left the municipality in a state of limbo,” the insider said. “Council had no option but to reverse the decision. The CFO issue is settled for now, but the uncertainty around administration and leadership remains.”

The attempted reinstatement of Phetla has dominated council politics in recent weeks, triggering legal action and prompting intervention by civil society. Earlier this week, the High Court issued an order suspending the council resolution, ruling that it had no legal effect pending a full review of the matter.

Despite the political instability, municipal insiders insist Matlosana is not facing financial collapse.

“The municipality is financially stable. Suppliers are paid on time and obligations to entities such as Eskom are being met,” the source said. “This is not a municipality in financial distress.”

However, concerns are growing about the possible consequences of placing the municipality under administration.

“It is worrying. We have seen municipalities put under administration and fail to recover,” the insider said. “The ANC’s call is extremely harsh and appears aimed at getting ahead of the DA’s legal challenge.”

Several South African municipalities placed under Section 139 administration have failed to recover, remaining dysfunctional with persistent financial mismanagement, poor audits, and service failures despite interventions.

Notable Examples:

• Emfuleni Local Municipality (Gauteng): Under administration multiple times since 2018, it spiralled deeper into debt, with unpaid creditors such as Eskom and Rand Water, sewage spills, and blackouts. There has been no recovery despite provincial oversight.​
• Mamusa Local Municipality (North West): Post-intervention, it was labelled dysfunctional by Parliament in 2021, with poor financial monitoring persisting and the recovery plan failing.​ The municipality has historically faced severe dysfunction, and as of 2025, the council's powers were stripped and vested in administrators.

• Ratlou Local Municipality (North West): It was placed under Section 139 in 2019/20, yielding no audit improvement. It has been stuck on a disclaimer with ongoing dysfunction.​ As of mid-2025, there has been a continued crisis, including a R1.4 billion irregular expenditure concern and protests by workers regarding financial mismanagement, non-compliance in hiring, and poor service delivery.
• Ditsobotla Local Municipality (North West): Repeated interventions couldn't lift it from habitual disclaimed audits; accountability is absent.​ It was placed under national administration in September 2025 due to persistent governance failures, financial mismanagement, and service delivery collapse. This intervention, led by the National CoGTA Ministry, addresses accumulated debt exceeding R1.6 billion, unfunded budgets, and ongoing political instability.

• Maluti-a-Phofung Local Municipality (Free State): It experienced chronic instability with no financial statements for four years. Audits remained unchanged pre/post-intervention.​ The municipality was placed under administration in February 2018 due to financial collapse and service delivery failures. Since then, its status has fluctuated.
• uThukela District Municipality (KZN): Section 139 was ineffective. As of September 2025, the KwaZulu-Natal Cooperative Governance and Traditional Affairs (CoGTA) Department removed the uThukela District Municipality from formal administration. Despite this, concerns over ongoing instability, service delivery failures, and potential corruption led to calls for continued support under Section 154 of the Constitution.

The DA has argued that the crisis is the result of unlawful political interference rather than structural failure within the municipality.

DA Councillor Gerhard Strydom said council was forced to rescind the resolution once it became clear that it violated the law.

“The council voted unanimously to reverse the illegal decision taken by an ANC-led faction, supported by the EFF, ACDP and PA, to reinstate the former CFO,” Strydom said.

“They were compelled, among other reasons, by a court order secured by civil society, to comply with the rule of law.”

Strydom said the former CFO still has legal remedies available but must follow due process.

“She must appeal the outcome of the disciplinary hearing in accordance with applicable legislation,” he said.

He also questioned the ANC’s ability to govern Matlosana, arguing that the municipality’s problems have worsened under its leadership.

“It is clear that the ANC in Matlosana is not capable of managing the municipality, which continues to deteriorate.” 

While supporting accountability, Strydom expressed doubt that the administration would provide a solution.

“Administrations have a poor track record. Unless there is a complete overhaul of management, including replacing all directors with administrators, it is unlikely to succeed,” he said.

He added that the episode reflected a deeper disregard for constitutional governance.

“It is deeply concerning that civil society had to resort to court action to force decision-makers to comply with the Constitution and the law,” Strydom said, adding that criminal charges have already been laid and will now follow due process.

The ANC’s provincial leadership maintains that provincial intervention is necessary to restore stability, enforce accountability, and implement findings from a Section 106 investigation under the Municipal Systems Act.

North West MEC for Cooperative Governance, Human Settlements and Traditional Affairs Gaoage Molapisi’s spokesperson, Lerato Gambu, said the decision to invoke Section 139(1)(b) rests with the Provincial Executive Council.

“This decision follows numerous unsuccessful interventions aimed at turning around the situation at Matlosana Local Municipality,” Gambu said. “The department has begun the process of formally communicating the decision, including consultations with key stakeholders and the national Minister of Cooperative Governance.”

Another municipal source warned that placing Matlosana under administration could have serious political and service delivery consequences, particularly with local government elections approaching.

“We should be focused on fixing service delivery issues like potholes and sewage overflows,” the source said. “Removing administrative powers will hurt residents, and they will express their frustration at the polls.”

[email protected]