‘Joburg is definitely not bankrupt’ — Morero takes on Godongwana over City’s finances

Johannesburg mayor Dada Morero has pushed back against Finance Minister Enoch Godongwana, insisting that Johannesburg is “definitely not bankrupt” and will not be placed under administration despite mounting concern over debt, delayed financial statements and a potential funding crisis.

The mayor confirmed he would meet Godongwana on Friday morning to respond to concerns raised by the National Treasury.

Morero was speaking after a community meeting in Naturena on Thursday night, where he attempted to calm fears sparked by Godongwana’s scathing letter to the City.

The letter, dated 23 April, warned that Johannesburg could lose its next equitable share tranche if urgent corrective action was not taken. This is because of the “deterioration in the City’s governance and overall financial health”.

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“The City is definitely not bankrupt and we will not be placed under administration,” Morero said repeatedly.

“We are providing daily refuse removal, water and electricity and other services adequately and paying salaries, servicing our loans. Our cash balance is an issue at times because residents in some areas are battling to pay their bills, but that is not a crisis.”

He also played down the letter and its contents.

“The minister has the responsibility of oversight. He has a mandate to exercise oversight on behalf of National Treasury. He has the right to raise concerns, but it does not mean what he says is cut in stone. We will explain all his concerns.”

The increasingly public standoff comes after Godongwana warned that Johannesburg’s governance and financial health had deteriorated to the point where the National Treasury was considering invoking section 216(2) of the Constitution to withhold the City’s July 2026 equitable share allocation.

The minister’s letter described the City’s March adjustment budget as unfunded, warned of probable unauthorised expenditure and cited failures to comply with the Municipal Finance Management Act and municipal accounting regulations.

Among the concerns raised by the Treasury were escalating debt levels, weak revenue collection, delayed financial statements, growing pressure from employee costs and bulk service payments, and the implementation of a controversial multibillion-rand wage agreement with the South African Municipal Workers’ Union (Samwu).

The warning followed several major financial blows to the metro in recent months, including the suspension of Johannesburg’s bonds by the Johannesburg Stock Exchange after the City failed to release audited financial statements for the financial year ending June 2025.

Meeting with AG

Morero said he had already met the Auditor-General of South Africa on Thursday to discuss the delayed statements.

“There had been audit issues with the financial statements being delayed, but they will be issued by the end of May. I explained that to the auditors today.”

The Treasury’s letter also raised alarm over Johannesburg’s ability to support its budget assumptions, particularly around revenue collection.

But Morero defended the City’s projections, saying the metro’s budget was based on an 87% collection rate, which he said had largely been achieved in recent months.

“We base the budget on assumptions, and ours is an 87% collection rate. If we maintain collection of 87%, we will be able to meet our bills. Last month, we were sitting at between 90% and 91%. If we do not meet this, we will revise the budget up or down during the six-month review.”

Morero acknowledged that the financial hardship of residents was affecting the City’s cash flow.

“We always have cash issues because people are battling to pay their bills.”

Samwu wage deal defended

The mayor also refused to back down from the politically contentious Samwu wage agreement that the Treasury had instructed the City to halt, with Godongwana reportedly describing it as an “illegally signed” deal with the potential to financially destabilise Johannesburg.

Morero defended the agreement as part of a long-running process dating back years.

“The wage agreement was concluded in 2016, and I found myself at the centre of it. It was a politically facilitated agreement and we will not go back on it, and the reality is that it has to be, and will be, implemented. We will find the resources to fund it and we will pay the workers what is due to them. We made commitments and we have an obligation to fulfil them.”

He also disputed claims that the City owed creditors R25.2-billion, saying the immediately payable amount was significantly lower, citing a figure of “closer to R6.8-billion”.

“All creditors will be paid,” he said.

Morero further acknowledged pressure around infrastructure spending, saying the City’s maintenance budget was at about 7% of expenditure, when it should ideally be 8%.

“We will push for 8% in the new financial year,” he said.

The mayor’s remarks signal that Johannesburg’s leadership intends to contest the Treasury’s interpretation of the metro’s financial position rather than concede to the possibility of outside intervention.

“We welcome the input by the minister and his concerns, but we will explain everything to him tomorrow [Friday],” Morero said. DM