
CITY OF JOHANNESBURG FINANCIAL CRISES
BY : CHANON LECODEY MERRICKS ONLINE EDITOR KASiBC_AFRiCA
Johannesburg’s Financial Crisis
The Minister of Finance, Enoch Godongwana, has blown the lid off the financial meltdown in the City of Johannesburg.
In a letter to Mayor Dada Morero, leaked out of the City and dated 23 April 2026, the Minister bluntly states that the City is effectively bankrupt. It owes its creditors R25,2-billion while only having cash and cash equivalents in hand of R3,9 billion. This means the City does not have the money to pay R21,3-billion Rand owed to creditors.
This is the core reason behind the City’s inability to repair or maintain infrastructure, leading to consistent power and water outages, and the failure to fix breakdowns, resulting in the steady collapse of service provision across the board.
The Minister’s letter also bluntly states that the City has violated the laws governing municipal finances and that these illegal actions have the “potential to destroy the sustainability of the City of Johannesburg beyond this term of Office as well as the negative impact on the national economy at large.”
The Minister then issues formal notice to the City that if it is not willing to “remedy this situation with immediate effect”, the National Treasury will invoke Section 216 (2) of the constitution and hold back Johannesburg’s allocation under the Division of Revenue Act. This amounts to over R8-billion, which would be the final nail in Johannesburg’s coffin.
This will profoundly affect the whole City, and in particular the delivery of subsidized services to the poor.

The Minister’s letter follows several financial body-blows to the City in recent months:
The Agence Française de Développement (AFD), refused the City’s request for a second loan of R2,5-billion because the City had failed to comply with conditions attached to an earlier loan granted in 2024.
The City’s bonds were suspended by the Johannesburg Stock Exchange for failing to submit the audited annual financial statements timeously.
Moody’s has warned of further downgrade in the City’s credit rating.
The expected regression in the City’s audit outcome.
In his letter, the Minister backed his threat by itemizing the City’s financial transgressions:
The Adjustment Budget passed in March is not funded. This amounts to unauthorized expenditure, a serious violation of the law. The City proceeded to pass the budget despite Treasury’s warnings.
The City’s failure to comply with the requirements of the Municipal Regulations on the Municipal Standard Chart of Accounts.
The City’s failure to prevent and address unauthorized, irregular, fruitless and wasteful expenditure.
The failure of the City to pay its creditors within 30 days of receiving an invoice, which is a violation of the Municipal Finance Management Act.
The unlawful introduction of the Politically Facilitated Agreement on wage adjustments into the adjustment budget. The Minister instructs the City to “stop proceeding with the implementation of this illegally signed agreement”. This vindicates the DA’s warning about the devastating financial impact of this agreement on the City of Johannesburg.
Overall, the Democratic Alliance has been warning for more than three years that the City was headed for a major financial crisis. We have also consistently warned in Council that the above decisions, alluded to in the Minister’s letter, were unlawful and that we would pursue corrective measures under Section 32 of the MFMA.
This means that we will seek to hold all councillors who supported these illegal decision in council, personally responsible for the recovery of the money lost to the City under Section 21 (1) of the MFMA which states that “Political office-bearers or officials who deliberately or negligently permit such expenditures are personally liable.”
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