The past few days have been a lot to deal with for the residents of Johannesburg. After suspicions, murmurs, denials and lies, it has been confirmed that the City of Johannesburg (CoJ) is bankrupt. In a scathing letter last week, Finance Minister Enoch Godongwana warned that the CoJ is in a financial crisis and should not go ahead with the R10 billion wage deal struck with the labour union, Samwu. Godongwana refers to the two-year wage agreement as "a financial obligation that is not possible to fulfil". He paints a picture of a City that is failing to collect revenue, not able to budget properly, and that continues to spend money it does not have.
That Joburg is not meeting its collection targets is something we have known for a while. A graphic featured in this newsletter recently showed that the City's collection rate has dropped from 86% to 82%. Godongwana revealed that the City owes its creditors R25 billion, and the figure keeps growing with no clear sign of how it plans to curb this runaway spending. Godongwana has asked Mayor Dada Morero to explain how he expects to reverse this situation. I am not holding my breath for a response.
Even if one comes, Morero knows that he will likely not be the mayor following the 4 November local government elections. Even if the ANC retains the mayoral chain through a coalition, he is unlikely to be the candidate.
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Another worrying trend flagged by Godongwana is over-expenditure amounting to R3.9 billion, largely made up of "employee-related costs, bulk purchases of electricity, inventory consumed, and operational costs". This is hardly surprising, as we now know that besides the R10 billion Samwu deal, the City's budget-guzzling entities continue to splurge.
In our top story for this newsletter, Yvonne Grimbeek reveals that the CEOs of the Johannesburg Property Company and the Joburg Tourism Company are due for a salary bonanza. If not stopped, the two will receive a whopping 62% salary jump for the 2026/27 financial year. Yvonne further reveals that executive pay for the City's senior management has risen by approximately 26% since 2022. This is unjustifiable and significantly above inflation. It is no wonder Godongwana is sounding the alarm.
At the same time, the City continues to squeeze ratepayers with tariffs that far outpace inflation. The City announced that for the 2026/27 financial year, water, electricity, and refuse removal will increase by 12.5%, 8.6% and 6.2%, respectively. With inflation currently sitting at around 3.2%, this trend of above-inflation hikes has persisted for at least five years. The people of Joburg deserve better than this.
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Ngalwa is the Editor-in-Chief of Our City News
