By Lehlohonolo Lehana.
City of Johannesburg Mayor Dada Morero maintained the city continues to exercise effective oversight and control over its financial responsibilities, saying that there is currently “no cause for concern”.
This is despite the City facing a severe financial crisis with outstanding consumer debt approaching R70 billion to R71.9 billion.
This massive backlog—owed by residents, businesses, and government—undermines infrastructure investment and has led to warnings of technical bankruptcy.
Morero insists the city is not bankrupt, “there is no cause for concern”.
“The City is not bankrupt. We’re still able to pay all our commitments on a month-to-month basis. We’re still paying our salaries,” Morero said.
“We’re still paying our suppliers. We’re still paying our loans that we’ve borrowed. So we are not a bankrupt city. We can account that our bank account is still fine. We’re still managing. Yes, there could be an issue in terms of what you refer to as the availability of cash.”
Morero confirmed that he will be meeting with Finance Minister Enoch Godongwana on Friday, 08 May 2026.
This follows a letter from National Treasury raising serious concerns about the metros finances.
In a strongly-worded letter, Godongwana has threatened to withhold billions in funding unless the city scraps a controversial R10.3 billion wage agreement.
At the heart of Godongwana’s concern is that the 2025/26 adjustment budget, approved by council on 20 March, is unfunded.
CoJ’s revenue collection is failing to meet budgeted targets, the minister said, and expenditure has been understated. This will likely result in unauthorised expenditure.
Godongwana noted a R3.9-billion over-expenditure on employee-related costs and bulk services as of January 2026.
While the National Treasury sets a 95% revenue collection target, Johannesburg consistently falls short. Only about half of its water supply generates revenue, due partly to infrastructure failures, and nearly 30% of the electricity it purchases from Eskom is lost.
The City’s debt to creditors has surged from R17-billion in 2022/23 to R25.2-billion in 2024/25, Godongwana said. Its cash of R3.9-billion is insufficient to cover these growing obligations.
Godongwana directed the City to stop implementing an “illegally signed” R10.3-billion salary-increase agreement reached with the South African Municipal Workers Union (SAMWU) in November 2025, which “is not possible to fulfil”.
The wage agreement has the “potential to destroy the sustainability of the City of Johannesburg”, which will have a “negative impact on the national economy at large”, wrote Godongwana.
Meanwhile the Freedom Front Plus (VF Plus) says it warned the City that exorbitant salary negotiations and a culture of non-payment would steer it straight into bankruptcy.
Franco de Lange says these warnings fell on deaf ears, though, and the consequences are now evident.
The controversial R10,3 billion salary increase offered to workers last year to avert labour action ahead of the G20 Summit was a turning point. At the time, the Freedom Front Plus warned that implementing such a decision would not only undermine the City’s short-term liquidity, but also its long-term sustainability, said de Lange.
“In addition, the Gauteng provincial government still owes the City approximately R1,4 billion.”
He added that the Freedom Front Plus also warned that the City’s financial credibility would be compromised. This warning materialised with Moody’s considering to downgrade Johannesburg’s credit rating and the Johannesburg Stock Exchange (JSE) suspending trading in the City’s bonds.