South Africa: City of Joburg's Financial Turmoil Imperils National Economy, Warns Finance Minister

By Ferial Haffajee

DA mayoral candidate Helen Zille is pressing for Joburg to be placed under National Treasury financial administration, while the ANC wants a meeting with the minister to protect a two-year, R10.3bn staff wage deal.

On 23 April, Finance Minister Enoch Godongwana wrote to the Johannesburg mayor, Dada Morero, stating that the City could not afford its recent salary increases.

At issue is a R10.3-billion, two-year salary deal the City signed with the SA Municipal Workers' Union (Samwu) in November 2025 to ward off protests ahead of the G20 meeting in Johannesburg. Workers say it addresses the outstanding salaries and benefits that they've been awaiting for years.

But it has come at the cost of services, as well as current and sorely needed capital investment in infrastructure, and has brought the City close to bankruptcy, according to the finance minister.

Godongwana's letter laid bare that the City is, in any case, effectively bankrupt: creditors are owed R25.2-billion, while the City has R3.9-billion in cash and equivalents. It lost R12.9-billion to unauthorised expenditure in 2023/24 (the latest official reports), while the debt-to-revenue ratio increased by 29% in 2024/25, signalling a growing reliance on debt to sustain its operations.

Godongwana instructed Morero to halt the "illegally signed agreement" and warned that it threatens both...

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