Final warning for South Africa’s richest city
Finance Minister Enoch Godongwana has reportedly given City of Joburg mayor Dada Morero two weeks to devise a plan to stem wasteful spending or face intervention.
According to the Sunday Times, Godongwana sent a letter to Morero at the end of July, lambasting his running of the city and its budget.
Joburg is South Africa’s richest city, managing a budget of R89 billion, yet it is in a state of collapse and disrepair across key metrics.
This includes long-running issues with service delivery related to electricity, water and infrastructure. Streets are full of potholes, bridges are collapsing, and residents sit without water and electricity for days.
According to city data, around 40% of Johannesburg’s water supply is lost due to leaking pipes and ageing infrastructure, leading to water cuts.
Electricity losses are also significant, with roughly 35% of power lost, primarily due to cable theft and illegal connections. These losses contribute to widespread outages and reduced service delivery.
This is happening in a metro that is responsible for 16% of South Africa’s GDP and employs 12% of the national workforce.
The paper quoted Godogngwana in the letter saying he was “not very pleased” with how the city’s finances were being handled, pointing to over R24 billion in irregular, fruitless, wasteful and unauthorised spending in 2024.
Godongwana reportedly chided the mayor for doing little to nothing to prevent this kind of spending, and for not complying with the Municipal Finance Management Act (MFMA).
The city now has two weeks to develop a plan to rectify the issue and to take action against officials who have breached the Act.
The letter, quoted by The Sunday Times, pointed to the possible withholding of funds to the city should this not be done.
The city of interventions
With Godongwana stepping into the mess in Joburg, this marks the third time that someone from the National Executive has had to intervene in the running of the city in some way.
In November 2024, Electricity Minister Kgosientsho Ramokgopa was forced to step into a dispute between Joburg and national power utility Eskom over unpaid bills.
Eskom was threatening to cut power to the metro, saying that over R4.9 billion was owed in municipal debt. Joburg counter-claimed more than R3 billion for irregular billing by the utility.
The matter dragged on for months, with the minister’s interventions ultimately resulting in a settlement agreement between the two that would see Joburg’s utility, City Power, pay R3.2 billion.
Under the agreement, City Power will pay Eskom R3.2 billion over four years, and in return, Eskom will waive R830 million in claims for interest, penalties, and exceeding the notified maximum demand.
While not a direct intervention, President Cyril Ramaphosa earlier this year expressed his own concerns and displeasure about the state of the city, calling for the local leadership to turn things around.
During an oversight visit in March, Ramaphosa said he was “not very pleased” with the running of the city, especially in the context of it being a host for the G20 later in the year.
He urged the mayor and his team to window dress the city to put up a good presenation for visiting G20 delegates.
With Godongwana’s reported letter, the National Treasury is now also on the city’s case, with more dire consequences hanging over its head.
Despite the state of the city and how it is being run, Morero enjoys a majority support from the Joburg council, surviving a no-confidence vote against him in June.
The second-largest party in the council, the DA, filed the motion against Morero on May 7. The vote was held on June 25, and the mayor survived with 144 votes in his favour. The council has 270 seats.
Those who voted in support of the mayor include the ANC, EFF, PA, and other smaller parties.
Action SA had supported and formed part of the coalition government up until this point. Despite being highly critical of Morero, the party abstained and consequently lost its Speaker seat in the council.
BusinessTech asked the City of Joburg to comment on the reported letter and will add it once it is received.
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