STATE OF FINANCES OF THE CITY OF JOHANNESBURG
BY : CHANON LECODEY MERRICKS ONLINE EDITOR KASiBC_AFRiCA
MEC DUNGA ON THE STATE OF FINANCES OF THE CITY OF JOHANNESBURG
The MEC of Finance, Nkululeko Dunga, is aware of the correspondence between the Minister of Finance, Enoch Godongwana, and the Executive Mayor of the City of Johannesburg, Cllr Dada Morero, regarding the intention to stop the equitable share to the municipality due to several transgressions of budget laws and associated regulatory instruments.
The MEC has been briefed by the Gauteng Provincial Treasury on the state of municipal finances in Gauteng, including the City of Johannesburg, and is aware of the serious concerns raised by the Minister of Finance.
The MEC fully appreciates the gravity of the situation and the direct impact that deteriorating municipal finances have on service delivery, infrastructure maintenance, payment of service providers, investor confidence, and the daily lives of residents across Gauteng.
The concerns raised by the Minister of Finance include poor revenue collection against budgeted targets, growing cash flow challenges and over-expenditure pressures, failure to pay creditors within the legally prescribed 30-day period, continued non-compliance with MSCOA regulations, weaknesses in financial reporting systems, and concerns regarding unfunded financial commitments which may further worsen the financial position of the City.
These are serious matters which the Gauteng Provincial Treasury has consistently raised with the City of Johannesburg at various intergovernmental forums coordinated by Treasury and attended by Chief Financial Officers of municipalities across Gauteng. As part of the MEC’s immediate tasks under the First 100 Days Programme, through Premier’s Coordinating Forum, will develop concrete interventions to deal decisively with the poor state of municipal finances across Gauteng. Attention will be given to the metropolitan municipalities, including the City of Johannesburg, to address the concerns raised by the Minister of Finance. These interventions will focus on improving financial governance, revenue management, compliance with the MFMA, cash flow management, and restoring institutional stability.
Through the Premier’s Coordinating Forum, and in consultation with municipalities, organised local government, and relevant stakeholders, the Gauteng Provincial Government will communicate a clear programme of action to the people of Gauteng aimed at restoring municipal financial sustainability and protecting service delivery. The MEC is in a process of finalising consultation on the press conference which will be announced in due course to specifically outline interventions on the above matters mentioned.
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