South Africa name host cities for Nations Cup
The rest of the 16-team tournament will be played in Durban, Nelspruit, Port Elizabeth and Rustenburg, which were all venues for the 2010 World Cup.
But new stadiums built for the World Cup in Cape Town and Polokwane have been left out, it was announced at a government briefing.
Cape Town had been the only proposed venue to publicly raise objections to being asked to pay around 22 million rand ($2.85 million) for the right to host matches.
The South African Football Association needs more than 100 million rand to finance the hosting of the three-week tournament next January 19-February 10.
The controversy over the funding of the tournament has seen the announcement of the host cities delayed three times.
Mbalula provided no clarity on the solution to the funding issue, but said the government would meet with the cities soon for talks.