JOHANNESBURG, Gauteng – The City of Johannesburg is confronting a severe financial crisis, marked by an unfunded R2.1 billion budget gap, shrinking cash reserves, and mounting debt to state utilities. Amidst this economic strain, the municipality has secured a R3.8 billion loan from the German development bank KfW to revitalize its struggling electricity utility, City Power. However, the deal comes under intense scrutiny as opposition parties demand strict oversight and accountability.
Adding to the municipality’s woes, the sheriff of the court recently seized assets at a customer service center located at Tuso House. Democratic Alliance (DA) caucus leader in the City of Johannesburg, Belinda Kayser-Echeozonjoku, described the asset attachment as a disgrace for the continent’s economic hub. The seizure stems from a dispute with the building’s landlord, Bayeta Capital. While the city owes the landlord a few million rand, reports indicate that Bayeta Capital simultaneously owes the municipality close to R40 million in rates and services. Kayser-Echeozonjoku questioned how a company with such a substantial outstanding debt is still permitted to conduct business with the city.
The financial mismanagement is not a new development. Kayser-Echeozonjoku noted that in May 2025, she formally requested the Presidency and the Special Investigating Unit (SIU) to investigate maladministration and financial mismanagement at JPC, which was under the leadership of Helen Botes at the time.
Regarding the new R3.8 billion KfW facility, the DA insisted on stringent conditions before offering its council support. The funds are strictly ring-fenced for electricity services. Furthermore, the German government has allocated a dedicated project manager to monitor the loan’s utilization. The DA also successfully negotiated a two-year salary freeze for City Power’s senior executives for the duration of the loan to ensure funds are directed toward service delivery rather than administrative bloat.
Despite the R3.8 billion injection, a massive R30 billion shortfall remains to cover City Power’s maintenance and infrastructure needs, especially since the city is currently failing to generate its targeted 90% of its own revenue. Compounding these issues, the Minister of Finance has issued a deadline and threatened to withhold the city’s equitable share for July. DA mayoral candidate Helen Zille emphasized that the Executive Mayor must urgently provide residents with a clear plan regarding Eskom and confirm whether a response has been sent to the Minister of Finance to avert a potential service cutoff in October.
The city is also embroiled in a legal battle over a proposed R10 billion wage agreement, which the DA argues is unaffordable, potentially illegal, and politically facilitated. The DA is taking the city to court over the matter. According to the opposition party, the Mayor bypassed the fiscal framework and financial turnaround plan passed on the 24th and 25th of June, opting instead to meet with the municipal workers’ union at the ANC headquarters to commit to the unaffordable agreement.
The DA has called for an investigation into the Mayor’s actions through relevant oversight bodies, alleging that the ruling party is using municipal funds and union instigation as political tools ahead of the November 4 elections. Kayser-Echeozonjoku stated that the DA is gathering evidence of behind-the-scenes instigation, vowing to protect residents’ funds from being used for political electioneering as the city braces for a change in government.
