From left, Joburg Deputy Mayor and Finance MMC Loyiso Masuku, Executive Mayor Dada Morero, and Environment MMC Jack Sekwaila address the media on 8 July (Photo: Salim Nkosi) At a briefing on Wednesday, 8 July, to announce a deal with the National Treasury, Johannesburg’s executive mayor, Dada Morero, admitted that even his own rubbish hadn’t been collected. He revealed that a severe cash crunch had left the waste utility Pikitup unable to pay contractors, disrupting services for residents across the city.
Morero said residents should begin to see improvements in basic services as a result of the deal.
“We have received correspondence from the National Treasury that confirmed the City’s 2026/27 budget is funded,” said Morero.
The deal contains four key components:
- The City and its entities will ringfence payments to Eskom and Rand Water from July.
- A politically facilitated wage deal with the South African Municipal Workers’ Union (Samwu), budgeted at R10.4-billion over three years, has been deferred from 1 July to an unspecified date.
- The City has regularised R1.8-billion in unauthorised, irregular, fruitless and wasteful expenditure. Morero did not detail how this had been done. The Auditor-General has expressed concerns that expenditure was simply being written off.
- The City will ringfence payments to Pikitup for waste management investment later in the year, while contractors are being paid and current collection problems should ease from this week.
This should mean that the National Treasury will pay out the R3.6-billion in conditional grants it threatened to hold back.
The briefing came a day after National Treasury confirmed it had withheld part of Johannesburg’s July equitable share allocation under section 216(2) of the Constitution after finding the City’s 2025/26 adjustment budget was unfunded. The Treasury argued that the city had overstated its expected revenue while understating expenditure, raising concerns about Johannesburg’s ability to meet its financial obligations.
Service delivery failures
Morero acknowledged that refuse collection had been disrupted in parts of Joburg, including in Region C, where he lives. He drew on his own experience to illustrate the extent of service delivery failures facing residents. He attributed the disruption to the City’s cash flow constraints, saying the administration was working to resolve problems as they arose.
Pikitup experienced cash-flow pressures that disrupted refuse collection across Johannesburg. Morero said the Mayoral Committee had considered a report on Pikitup’s financial position and would allocate funding for fleet maintenance, fuel, landfill operations and other essential services needed to restore refuse collection.
He said an initial operational allocation would be prioritised to settle outstanding payments to service providers and rebuild supplier confidence, adding that operations had resumed on Monday.
Billions owed
The National Treasury has previously flagged Joburg’s unfunded budget. A leaked Treasury letter from April shows the city has a debt burden of about R25.2-billion, while it holds cash of R2.8-billion — enough for 12 days — when it should have enough cash to cover between 32 and 90 days.
The City also owes Eskom approximately R3.7-billion and Rand Water about R1.2-billion. It will pay R1.4-billion to Eskom later this month and R960-million to Rand Water, the bulk water supplier.
“We have identified the actual drivers of new expenditure rather than treating unauthorised, irregular, fruitless and wasteful expenditure as a single, indistinct number,” said Morero, adding that City Power payments to Eskom for bulk electricity made up the lion’s share of its debts.
Eskom tariff increases have overshot inflation by many percentage points for the past three years.
Despite these concerns, Morero has constantly denied that Joburg is in a financial crisis. He said the Treasury’s correspondence that the budget is now funded “is comforting feedback as it confirms that our financial management is okay and has not reached a crisis state”.
Morero also acknowledged that more work was needed to improve cash-flow management and revenue performance.
/file/attachments/orphans/IMG_2616_442218.jpg "Johannesburg Executive Mayor Dada Morero (in blue jacket) and members of the mayoral executive respond to questions from the media on correspondence received from the National Treasury and other key matters affecting the City. (Photo: Salim Nkosi)")
The mayor said Eskom would receive R1.6-billion of the conditional grant to make the utility payments. He said he expected the Treasury to release the withheld equitable share allocation once those payments had been made.
Morero added that the City was continuing to work with the National Treasury through existing intergovernmental structures to address its financial challenges.
Agreement with Samwu
In 2025, the City signed the R10-billion wage deal with Samwu, aimed at aligning Joburg staff salaries with those of other metropolitan municipalities. The agreement committed the City to spending an estimated R10.3-billion over three years, with a first payment of R5.6-billion due on 1 July. That payment has now been deferred.
In April, the National Treasury instructed the city to halt implementation of the agreement, stating that it had been unlawfully concluded and could “destroy the sustainability of the City of Johannesburg beyond this term of office”.
Although implementation of the deal has been suspended, Morero continued to defend it. He told Daily Maverick the City had submitted a report to the National Treasury setting out why it believes the agreement should proceed.
Morero said the administration was working to improve revenue collection, modernise billing systems, and strengthen financial governance while protecting essential services such as water, electricity, refuse removal and public safety.
“The challenges we face are real but not insurmountable, and they did not arise under this administration alone; many have built up over the years. What is new is the discipline, transparency and accountability with which we are now confronting them,” said Morero.
He also urged residents to prepare for Rand Water’s planned maintenance starting on Friday, 17 July, warning that some areas may experience low water pressure or temporary water outages as reservoirs recover. DM