Finance minister warns Joburg is in ‘severe financial distress’ in letter to Mayor Morero

Key findings in the minister’s letter

The letter, dated 23 April 2026, says the City’s creditors are owed R25.2-billion, up from R17-billion at the end of the 2022/23 financial year. It states the City had R3.9-billion in cash and cash equivalents in 2024/25, and that this is insufficient to repay creditors.

As Godongwana wrote:

“The City’s cash and cash equivalent of R3.9-billion in 2024/25 is insufficient to repay creditors R25.2-billion,”

and added that

“This is a marker of severe financial distress, indicating that the City does not have the liquidity required to pay its creditors.”

Wage deal with Samwu labelled unfunded

The minister said the City’s wage agreement with the SA Municipal Workers Union (Samwu) a commitment of R10.3-billion over two years reached to end a wage dispute is unfunded. The letter says the agreement was signed by Mayor Morero to prevent strikes ahead of the G20 summit.

Godongwana asked Morero to explain how he will arrest or reverse the unfunded deal and directed him to stop implementation of what the letter called the “illegally signed” agreement, saying it had the potential to destroy the City’s sustainability and to negatively affect the national economy.

The minister further wrote:

“Taking into cognizance [sic] the current state of finances using the creditors and cash equivalents as a matrix, you have committed the city to a financial obligation that is not possible to fulfil. Of concern is that this decision is a direct transgression of the MFMA [Municipal Finance Management Act] and budget and reporting regulations. You are requested to indicate what measures will be implemented and how this violation will be arrested or reversed.”

Other financial problems flagged

Godongwana’s letter also highlights a number of financial weaknesses in the City’s books, including:

• Revenue collection is not meeting targets.
• Johannesburg Water has overestimated its revenue projections.
• The City had overspent by R3.9-billion by the end of January on staff costs, electricity bulk purchases, inventory and operations.
• Projected revenue improvements are not being sustained.
• The Johannesburg Roads Agency budgeted R708-million for capital expenditure but the money was not in the bank.
• Johannesburg’s equitable share allocation from Treasury was reduced from R979-million to R455.9-million.

Responses from political and labour figures

Responding to the letter, Rise Mzansi’s Makashule Gana said the City is “playing politics and cutting corners to everyone’s demise”. He said this would leave residents, employees and the business community to suffer from problems including unsafe streets, leaking pipes, uncollected refuse and crumbling roads.

The Congress of South African Trade Unions (Cosatu)’s Greater Johannesburg region accused Godongwana of prioritising “fiscal austerity over the livelihoods of workers” and of disregarding collective bargaining. Cosatu said:

“We demand that the National Treasury cease its adversarial approach toward workers and honour the agreements made to ensure fair compensation.”

It also warned it would “escalate this matter to the highest levels of struggle” if the finance minister held out.

Wider fiscal context

The article notes that in April, Moody’s placed the City’s credit ratings on review for a possible downgrade. In March, the Johannesburg Stock Exchange suspended the City’s debt instruments; financial officials described that action as a technicality being addressed with the Auditor‑General. The article also reports that on 22 April, Bloomberg said the French development funder AFD had rejected a City loan request.

City comment

The City had not immediately commented on the minister’s letter at the time of reporting. The Daily Maverick article was updated to include Cosatu’s comment.