Joburg to sell R3.2bn in vacant land as part of financial stabilisation push

Mayor announces sale of vacant land worth R3.2bn

In his State of the City Address on Wednesday, Johannesburg mayor Dada Morero said the city will dispose of non-strategic assets by selling the vacant land portion of its debtors’ book, which is currently valued at R3.2bn.

What the city told residents

Speaking at St. Mary’s Cathedral in the Desmond Tutu Precinct in downtown Johannesburg, Morero framed the move as an immediate step to stabilise the municipality’s finances. He said the ANC-led government of local unity (GLU) inherited a broke city when it took over in 2019 from a DA-led coalition and described the work since then as rebuilding financial systems and controls.

“This will include the sale of the vacant land portion of our debtor’s book. The vacant land debtors’ book is currently valued at R3.2bn,”

“For us this meant, rebuilding financial systems and putting in place controls. We are grateful for the trust you have shown in us,”

Financial and service pressures cited by the mayor

Morero highlighted ongoing financial pressures affecting the city. He referred to a notice from national power utility Eskom, linked to unpaid obligations, and warned the city is taking the matter seriously.

“We are concerned about Eskom’s latest notice, and we are taking it seriously. This challenge is not only affecting the City of Johannesburg but several municipalities across the country. “We will not fight Eskom. We will work with the Minister of Electricity and Energy (Dr. Kgosientsho Ramokgopa), and SALGA (SA Local Government Association) to resolve this challenge,”

Plans beyond the land sale

Morero said City Power has a turnaround plan and that the city is following guidance from National Treasury and the Department of Cooperative Governance and Traditional Affairs to reform municipal trading entities.

“Part of the solution is to implement National Treasury and Departments of Cooperative Governance and Traditional Affairs guidance to reform and strengthen Municipal Trading Entities. “This reform agenda will assist the city to improve governance, financial sustainability, operational efficiency and accountability within entities that have historically operated under significant fiscal and infrastructure pressure,”

The mayor also announced that the city has issued requests for proposals to approved development finance institutions and reached an agreement in principle with German state-owned KfW Development Bank to provide a loan of €200 million (over R3.83bn) to fund energy-related projects. He said the city, as borrower, and City Power, as execution agent, are finalising a contract with KfW with the expectation that the loan will be disbursed before end of June 2026.

City’s fiscal targets and context

Morero said the city forecasted revenue growth of 9.3% supported by tariff increases and an operational surplus of R4.1bn. He said the city aims to achieve a debt-to-revenue ratio target of 30% and a net operating surplus of 3%. The administration has kept employee costs within threshold at 28% of its operating budget, he added.

What this means for residents

The mayor presented the land sale and the proposed KfW loan as parts of a broader effort to stabilise Johannesburg’s finances and address service delivery risks. Residents were told the city is managing debt challenges and working with national stakeholders on electricity and municipal entity reforms.

Key facts:

• Vacant land debtors’ book value: R3.2bn
• Outstanding municipal debt to Eskom mentioned in the address: related notice and concern (as described by the mayor)
• Agreement in principle: KfW loan of €200 million (over R3.83bn) to fund energy projects, expected disbursement before end of June 2026