Durban may not be able to host the 2022 Commonwealth Games due to the cost of staging the event, South Africa's Sports Minister Fikile Mbalula said.
South African officials said in December that they remained "fully committed" to hosting the event despite falling short of requirements.
Durban was awarded the Games in 2015 after being the only city to make a confirmed bid. Edmonton, Canada had withdrawn from the running, citing falling oil prices.
"I don't want to raise your expectations and say everything looks good, it doesn't because we don't agree on the fundamentals and that is the operational budget," Mbalula told a media briefing.
South Africa was forced to reconsider whether it could host the event due to doubts over the economic legacy of the Games and sluggish growth. The government estimated that the Games could deliver up to 20 billion rand ($1.54 billion) in output to the economy.
"We gave it our best shot but we can't go beyond, if the country says we don't have this money, we can't really," Mbalula said, adding that a final decision would be made soon by the Commonwealth Games Federation.
The Commonwealth Games, first staged in 1930, are a multi-sport event held every four years featuring athletes from over 50 countries, mostly former British colonies.
The 2022 Games could be the first time they have been held in Africa, possibly setting up the chance for South Africa to make another bid for the Olympics after Cape Town finished third in the race for the 2004 summer Games.