Johannesburg mayor feels the heat

The executive mayor of South Africa’s richest city, Johannesburg, is under pressure from national government to get the city’s finances in order – or face funding cuts.

Finance Minister Enoch Godongwana wrote a letter to Mayor Dada Morero, warning that the National Treasury might withhold funding from Johannesburg unless the city explains how it plans to tackle ongoing unauthorised, irregular, fruitless, and wasteful spending (UIFWE).

Godongwana noted that its recent Auditor-General report identified Johannesburg as a metro with weak financial controls and a failure to investigate UIFWE.

The City of Johannesburg’s consolidated audited financial statements for 2023/24 reveal that the city is bleeding funds: R1.4 billion in unauthorised expenditure, R1.5 billion in irregular expenditure, and R17 million in fruitless and wasteful spending.

Cumulative irregular expenditure, carried over from previous years, has ballooned to R22.2 billion and fruitless and wasteful expenditure stands at over R705 million.

In terms of South African municipal legislation, such irregular spending remains on the books until it is recovered, written off, or condoned by the National Treasury.

Just days ago, the council approved the write-off of over R144 million in UIFWE.

In his letter, Godongwana stated that municipalities must either recover UIFWE or write it off, once identified, following an investigation. They are also required to show that they have applied consequences.

However, Johannesburg’s audited financial statements reveal that the municipality has “taken little to no action… to address UIFWE.”

He also questioned whether the City had adequate systems to detect poor spending.

Despite repeated engagements between the National Treasury and the municipality, he said there had been no meaningful reduction in reported UIFWE.

Morero has been given two weeks to submit an action plan which must include “consequence management” against responsible officials, including councillors.

Johannesburg’s R89 billion budget relies on grants, loans, and revenue collection, but its failure to curb UIFWE now threatens that funding.

Godongwana warned the City had breached the Municipal Finance Management Act, and that Treasury could invoke section 216(2) of the Constitution to halt fund transfers if their house is not put in order.

Mayor Morero’s office did not respond to queries from Newsday in time. Comments will be added if recveived.

Meanwhile, on Sunday, African National Congress (ANC) Gauteng leader and Premier Panyaza Lesufi said that the “mayor is very clear, with the bomb squad he has established and the presidential team that has been assigned to assist us here, all these issues that are identified are issues they have moved on.”

“They have attended to them, its just that the letter came on the basis that what they are seeing is the last report they have received, but in between this period the letter was written and what they have done as a municipality, there has been meaningful progress.”

The DA reacts to Finance Minister Enoch Godongwana’s letter

The Democratic Alliance (DA) in Johannesburg has warned that losing grant funding would collapse the city, with residents suffering the most.

“If Treasury pulls back or suspends these funds, as the Minister warns in his letter, the City’s ability to deliver the little basic services it is currently able to deliver, will collapse entirely,” said caucus leader Belinda Kayser-Echeozonjoku.

The DA says it repeatedly warned both the national government and Morero about the city’s deepening financial crisis, citing poor leadership, a lack of consequence management, and escalating wasteful expenditure.

It welcomed the finance minister’s acknowledgment of these concerns and criticised the council for ignoring prior warnings, particularly over costly, unlawful decisions like the now-invalidated VIP protection policy.

The party also accused the City of refusing to disclose how much has been lost due to court defeats and vowed to keep pressing for answers.

“The City’s finances are in freefall, service delivery is grinding to a halt, and now the very funding that keeps Johannesburg afloat is under threat,” said Kayser-Echeozonjoku.