JOHANNESBURG — Johannesburg’s R97 billion budget and Mayor Dada Morero’s debt recovery plan are facing intense scrutiny after the Democratic Alliance (DA) expressed skepticism over the city’s ability to resolve its financial crisis. Following a press briefing regarding National Treasury’s decision to freeze municipal funding, DA Shadow Finance MMC Chris Santana stated the party is “definitely not sold” on the mayor’s confidence that the city can pay its creditors and restore service delivery by mid-July.
During the briefing, Mayor Morero projected optimism, asserting that the city is not in a severe financial crunch and can meet the National Treasury’s criteria to unlock the second tranche of funding in December. He highlighted that the city has successfully met one of the Treasury’s four key pillars by delivering a fully funded R97 billion budget for the 2026/27 financial year in March, a milestone achieved under Finance MMC Loyiso Masuku.
To demonstrate financial recovery, Morero outlined immediate payment plans, stating the city will pay Eskom approximately R1.4 billion once cash is received, and settle a R960 million debt with Rand Water by the end of the month. He also emphasized improved coordination with these state-owned entities.
However, the financial reality presents a starkly different picture. While the National Treasury allows a cash flow leeway of 32 days, the city currently holds enough liquidity to cover only 12 days. This severe shortfall has already begun impacting residents, with journalists in the room noting widespread service delivery failures, including water and electricity outages, as well as uncollected refuse in various parts of the city. Morero attributed the refuse collection failures directly to cash flow management issues.
Speaking in response to the mayor’s claims, Chris Santana dismissed the recovery plan, pointing out glaring inconsistencies and a lack of transparency. While Morero announced a R1.6 billion payment to Eskom, Santana noted that media reports indicate a staggering R5.3 billion is actually outstanding, with no clear timelines or agreements provided to the council or the public.
“Money buys the whiskey,” Santana remarked, emphasizing that despite the mayor’s rhetoric, implementation is lacking. He criticized the administration for violating the Municipal Finance Management Act (MFMA), specifically failing to submit timely reports to the council and failing to pay creditors within the mandated 30 days. Santana also referenced a previous briefing on May 9, where the mayor claimed a 96% collection rate, yet no supporting reports were ever presented to the council.
Finance MMC Loyiso Masuku acknowledged the severity of the crisis, noting that a special council sitting will be held in July to address these issues. Masuku also pointed out that the city’s current financial challenges stem back to 2016, suggesting a decade of compounding mismanagement.
To stabilize the city’s finances, Santana proposed several structural reforms. These include implementing a debt rehabilitation program to address historical non-payments, encouraging residents to pay for their services, and unbundling and restructuring the city to eliminate duplicate structures and free up capital.
Furthermore, Santana stressed the urgent need for consequence management, calling for actual criminal charges and court actions against officials involved in irregular, fruitless, and wasteful expenditure. He argued that the root of the city’s financial woes lies in flawed supply chain management and procurement processes, where tenders are awarded to unqualified entities.
Compounding the city’s liquidity crisis is the fact that Johannesburg is owed approximately R60 billion by households, businesses, and government departments—an amount representing roughly two-thirds of its newly adopted R97 billion budget.
The Auditor General of South Africa has echoed these sentiments, emphasizing that strong leadership within local government is essential for municipalities to work efficiently and deliver on their mandates. As the city struggles to strengthen its pillars of financial management and consequence management, the pressure mounts on Mayor Morero and his team to prove that Johannesburg’s recovery is more than just words.
