JOHANNESBURG, GAUTENG – As the crisis surrounding Joburg finances deepens, civil society leaders are raising alarms over the national government’s decision to explore withholding funding from the municipality. Julia Fish, Executive Director of JoburgCan—a civil society group operating under the Joburg Action Group—stated that Finance Minister Enoch Godongwana’s final notice to cut financial support is the only mechanism the National Treasury has left to intervene, despite the severe consequences it holds for the city.
While the City of Johannesburg and its mayor maintain that the municipality is not bankrupt, recent revelations have painted a grim picture of the city’s economic health. The city has faced intense scrutiny after appearing before Parliament and the Standing Committee on Public Accounts (SCOPA). This marks the third letter from the Treasury, with the Auditor-General also increasing pressure regarding the municipality’s financial disclosures.
The cash flow problems are already manifesting in city operations. Kenny Kunene, the Member of the Mayoral Committee (MMC) for Transport, recently noted that the Johannesburg Roads Agency (JRA) fleet has been grounded due to severe cash shortages. Fish highlighted that this financial collapse did not happen overnight, pointing out that the revenue collection rate is completely out of sync with the actual budget. Furthermore, the city’s expenditure has doubled over the last decade, rendering the budget nearly ungovernable across various municipal silos and section 79 committees, where oversight boards are supposed to be applying the brakes. National government, business, and civil society are no longer buying the city’s narrative that everything is being fixed.
Despite the financial strain, the city’s latest budget proposes the employment of 700 new managers. Fish criticized this move, noting that the wage bill already consumes a massive 30% of the city’s R90 billion operations budget. Beyond staff costs, the municipality continues to spend heavily on external contractors. For instance, even with the proposed hiring of expertise within the group legal department, the city still relies on numerous external law firms to handle policy and implementation work, effectively doubling down on contractor spending and executive costs.
The efficiency of the current workforce is also under question. According to the Auditor-General’s report, the city only achieved 40% of its service level agreement standards for the year. Fish argued that this statistic implies at least 60% of the city’s staff are failing to perform their duties, making continued spending on personnel extraordinary.
A major point of contention is the lack of intervention from the provincial government. Fish emphasized that the province should have acted as the first stopgap, implementing oversight or appointing an administrator long before the national Treasury was forced to consider extreme measures. Instead, the province has remained largely silent. They only sent teams in during the recent water crisis to make noise about the lack of water, rather than addressing the fact that service delivery was crumbling across the city.
The potential withdrawal of national funding threatens to be catastrophic. Fish warned that pulling the grants will simply mean the money is reassigned elsewhere and not spent in Johannesburg, further “unfunding” an already unfunded budget. Because labor laws prevent the city from making massive slashes to personnel contracts, the budget cuts will inevitably fall on service delivery. This will result in even worse conditions across the city, effectively punishing ordinary residents and citizens rather than holding the executive, the legislature, or the provincial administration accountable.
Ultimately, Joburg Can is pleading with the National Treasury to reconsider a total halt on grants. Instead, Fish urged the government to implement strict oversight by placing administrators on the ground in Johannesburg to directly manage and monitor how the funds are spent, ensuring that the city’s lifeline is maintained while fixing the administration’s financial mismanagement.
