Finance Minister Enoch Godongwana has warned the City of Joburg about the state of its finances. (Photo: Dwayne Senior / Bloomberg via Getty Images) In a second letter in less than a year, Finance Minister Enoch Godongwana has warned Johannesburg mayor Dada Morero that the City’s budget is unfunded and that it is in severe financial distress. He has also instructed the mayor to explain how he intends to fund a massive wage deal with the City’s workers and ordered implementation to stop.
Godongwana’s letter reveals that creditors are owed R25.2-billion, up from R17-billion at the end of the 2022/23 financial year.
“The City’s cash and cash equivalent of R3.9-billion in 2024/25 is insufficient to repay creditors R25.2-billion,” said Godongwana in the letter dated 24 April 2026.
“This is a marker of severe financial distress, indicating that the City does not have the liquidity required to pay its creditors,” wrote Godongwana.
The finance minister said the City’s wage agreement with the SA Municipal Workers Union (Samwu), committing to R10.3-billion over two years to end a wage dispute, was unfunded. Morero signed the agreement with Samwu to prevent strikes before the G20 summit. The DA has taken the wage deal to court.
Samwu had not immediately responded to requests for comment on Wednesday.
Godongwana has asked Morero to explain how he will arrest or reverse this unfunded deal, and directed him to stop the implementation of the “illegally signed” agreement, which had the potential to destroy the sustainability of the City and to negatively affect the national economy.
“Taking into cognizence [sic] the current state of finances using the creditors and cash equivalents as a matrix, you have committed the city to a financial obligation that is not possible to fulfil. Of concern is that this decision is a direct transgression of the MFMA [Municipal Finance Management Act] and budget and reporting regulations. You are requested to indicate what measures will be implemented and how this violation will be arrested or reversed.”
Godongwana’s letter also reveals:
- The City’s revenue collection is not meeting targets.
- Johannesburg Water has overestimated its revenue projections.
- The City has overspent by R3.9-billion by the end of January on staff costs, electricity bulk purchases, inventory and operations.
- Projected revenue improvements are not being sustained.
- The Johannesburg Roads Agency budgeted R708-million for capital expenditure, but the money wasn’t in the bank.
- Johannesburg’s equitable share allocation from the Treasury has been slashed from R979-million to R455.9-million.
Responding to the letter on Wednesday, Rise Mzansi’s Makashule Gana said the City is “playing politics and cutting corners to everyone’s demise”.
“As a result, the City’s six million residents, the City’s employees, and the broader business community will continue to suffer from unsafe streets, leaking pipes, uncollected refuse and crumbling roads.”
Cosatu’s Greater Johannesburg region accused Godongwana of prioritising “fiscal austerity over the livelihoods of workers” and disregarding collective bargaining.
“We demand that the National Treasury cease its adversarial approach toward workers and honour the agreements made to ensure fair compensation,” it said, threatening to “escalate this matter to the highest levels of struggle” if Godongwana holds out.
The City had not immediately commented on the letter at the time of writing.
In April, Moody’s placed the City’s credit ratings on review for a possible downgrade. In March, the Johannesburg Stock Exchange suspended the City’s debt instruments – financial officials said it was a technicality that was being sorted out with the Auditor-General. On April 22, Bloomberg reported that the French development funder, the AFD, had rejected a City loan request. DM
This article has been updated to include Cosatu’s comment. (Updated: 6 May 2026)