JOHANNESBURG, Gauteng — Johannesburg Mayor Dada Morero has outlined a comprehensive financial recovery plan to address the municipality’s escalating Eskom debt and broader service delivery challenges. Speaking on the city’s ongoing efforts to stabilize its finances, the executive mayor detailed how the municipality intends to clear its current accounts with key utility providers while navigating a recent funding freeze imposed by the National Treasury.
A major component of this recovery strategy involves settling outstanding utility bills. Morero confirmed that the city will pay R960 million to Rand Water this month to bring its account up to date, noting that the municipality is largely managing its water obligations without major challenges. However, the situation with Eskom remains more complex. The city faces a current liability of R1.4 billion to the power utility, alongside a staggering long-term liability estimated at R10 billion. Morero acknowledged that the city defaulted on a payment agreement in January due to severe cash flow constraints but assured that the municipality is now “almost at current account” with Eskom.
According to the mayor, the city expects to clear its current Eskom arrears by the end of its current administrative term in November. He explained that the high cost of bulk electricity purchases, driven by Eskom’s peak and non-peak tariff structures, places a heavy burden on the municipality. Because the city’s approved tariffs do not match Eskom’s peak rates, Johannesburg effectively subsidizes its residents’ electricity costs, exacerbating the financial strain.
The financial restructuring comes as the city emerges from a National Treasury funding freeze. Johannesburg was among 69 municipalities affected by the halt in funding, which was triggered by concerns over unfunded budgets and R22 billion in flagged irregular spending from the previous year. Morero clarified that the city never passed an unfunded budget. Following a thorough assessment of the 2026/2027 financial year and the city’s adjusted budget processes from January to March, National Treasury has officially closed the matter and expressed satisfaction with the municipality’s financial planning.
To facilitate the payment of utility debts, National Treasury has agreed to release the city’s equitable share allocation. This release is contingent upon Johannesburg submitting signed acknowledgment letters from both Eskom and Rand Water. Morero expects these documents to be finalized by Friday, which will unlock the funds needed to settle the outstanding unauthorized expenditure and bring the utility accounts current.
Addressing the historical irregular spending, the mayor noted that the city presented a comprehensive reduction strategy to National Treasury at the end of June. This strategy targets a four-year history of unauthorized expenditure. Furthermore, Morero announced that matters relating to investigations and consequence management will be tabled at the upcoming July council meeting, signaling a push for greater accountability.
On the service delivery front, the city recently experienced a seven-day halt in waste collection due to cash flow issues and disputes involving casual workers. Morero confirmed that the backlog was resolved on Tuesday evening, with operations resuming. He clarified that casual workers are not direct employees of the city but are recruited through contracted services, meaning the contractors are responsible for paying them. The city expects to clear the waste collection backlog within three days.
Finally, addressing concerns about weak procurement processes vulnerable to graft, Morero highlighted the municipality’s anti-corruption measures. He stated that all tenders exceeding R5 million now undergo a rigorous pre-procurement review by an independent entity. This process is designed to verify fairness and compliance with supply chain policies. While acknowledging that corruption remains “enemy number one” for the municipality, the mayor expressed confidence that these tightened controls are significantly reducing the impact of graft on tender processes.
