South Africa’s richest city in serious trouble

South Africa’s National Treasury will withhold funding from Johannesburg and dozens of other municipalities for at least a month.

This action followed after persistent and serious non-compliance with financial management regulations, officials said on Wednesday, 8 July 2026.

The move comes before the November local elections, in which Johannesburg is expected to be among the most hotly contested battlegrounds.

Ogalaletseng Gaarekwe, Treasury’s deputy director general of intergovernmental relations, shared information about the issue during a news conference.

Gaarekwe explained that R3.6 billion rand in funding would be withheld from Johannesburg in July.

She stressed the move did not amount to placing the city under administration, and that the same action applied to many other local governments.

69 municipalities will have a portion of their funding suspended until September unless they can show they have reduced wasteful expenditure by at least 25%.

Finance Minister Enoch Godongwana has repeatedly raised concerns about Johannesburg’s financial management.

In May, the city approved a R97.1 billion budget that Treasury said was unfunded because planned spending exceeded realistic revenue projections.

What was particularly concerning was the budget’s sharp increase in the municipal wage bill, which Godongwana warned was unsustainable.

The National Treasury said that transfers will resume once Johannesburg has met the required conditions and has submitted proof of those conditions.

It added that it will keep working with all the affected municipalities to strengthen sound financial management.

OUTA welcomes the decision

The Organisation Undoing Tax Abuse (OUTA) welcomed the National Treasury’s decision to temporarily withhold grant funding from the City of Johannesburg.

“Treasury’s action demonstrates that persistent financial mismanagement can no longer be tolerated,” said OUTA CEO Wayne Duvenage.

“Municipalities must meet the standards of sound financial governance before receiving further public funds.”

Following the National Treasury’s action, Johannesburg Mayor Dada Morero said the city is now meeting all conditions and that its revised budget is fully funded.

Morero added that once the withheld grant funding is released, they will settle outstanding debts owed to Eskom and Rand Water.

The City of Johannesburg mayor added that they will implement stronger financial controls and governance reforms.

Duvenage was not convinced. “These commitments by Mayor Morero are encouraging, but they are merely words,” he said.

“The City has made similar assurances before, while its financial position has continued to deteriorate.”

He urged the National Treasury to withhold funding until it is satisfied that Johannesburg has demonstrated genuine compliance with all of the prescribed conditions.

“This cannot become another exercise in producing recovery plans that look impressive on paper but fail in implementation,” said Duvenage.