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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)

Chapter 14 : General Treasury Matters

164. Forbidden activities


(1) No municipality or municipal entity may—
(a) conduct any commercial activities—
(i) otherwise than in the exercise of the powers and functions assigned to it in terms of the Constitution or national or provincial legislation; or
(ii) outside the borders of the Republic;
(b) provide a municipal service in an area outside its jurisdiction except with the approval of the council of the municipality having jurisdiction in that area; or
(c) make loans to—
(i) councillors or officials of the municipality;
(ii) directors or officials of the entity; or
(iii) members of the public.


(2) If a municipality or municipal entity on the date on which this section takes effect is engaged in any activity prohibited by subsection (1)(a) or (b) and which is otherwise lawful, the municipality or entity must take all reasonable steps to rectify its position and to comply with that subsection as soon as may be reasonable in the circumstances.