This study investigated the benthic microalgal dynamics in a temporarily closed microtidal estuary situated along a degraded stretch of coastline, where estuaries are impacted by development, flow modification, and nutrient pollution. The near natural, perched uMdlotane Estuary experienced regular high flow conditions that maintained the open mouth state for 40% of the study period. Increased nutrient input originated from agricultural-return flow derived from the extensive catchment sugarcane farming (55.9%). No notable temporal differences were recorded for the benthic microalgal biomass (range: 0–41.3 mg m−2). The benthic diatom diversity and evenness indices ranged between 0.6 and 3.1 H′ and 0.2–1 J′, respectively. Higher benthic microalgal biomass (14.9 ± 15.6 mg m−2) coincided with lower diatom diversity (1.3 H’) in the lower reaches. The habitat stability provided by the rooted Stuckenia pectinata facilitated benthic microalgal accumulation, while the absence of sediment disturbance contributed to the decrease in the benthic diatom diversity. The benthic diatom species Cocconeis lineata, Halamphora acutiuscula, and Hantzschia amphioxys largely dominated the community. Temporal differentiation in benthic diatom composition was driven by salinity, water temperature, phosphate, and photic depth changes. The pollution tolerant species Cyclotella atomus increased in abundance (sub-dominant RA = 5%) in response to increased phosphate availability. The presence of nutrient tolerant taxa serves as an early warning of impending environmental deterioration. Implementation of an adaptive management approach supported by monitoring is required to facilitate timely interventions to prevent the loss of ecosystem functionality induced by nutrient enrichment.