The Democratic Alliance (DA) in Gauteng has intensified calls for urgent intervention in the City of Johannesburg, demanding that President Cyril Ramaphosa place the metro under financial administration amid worsening concerns over collapsing service delivery and the city’s deteriorating finances.
The renewed pressure comes after Finance Minister Enoch Godongwana issued a strongly worded letter to Johannesburg Mayor Dada Morero, warning of serious breaches of municipal finance laws and regulations.
The letter, titled “Transgressions of the Budget Laws and Associated Regulatory Instruments by the City of Johannesburg Metropolitan Municipality”, paints a bleak picture of the financial state of South Africa’s economic hub.
Among the most alarming revelations contained in the letter is that the City of Johannesburg owes creditors approximately R25 billion while only holding around R4 billion in cash and cash equivalents — leaving the metro with a shortfall exceeding R21 billion.
National Treasury described the situation as a sign of severe financial distress, warning that the city does not have sufficient liquidity to meet its obligations.
Morero confirmed that he has scheduled a meeting with the National Treasury and Godongwana following receipt of the letter last Friday.
The meeting is expected to focus on Treasury’s concerns regarding the city’s finances, governance failures and compliance with the Municipal Finance Management Act (MFMA).
The DA said the Treasury warning validates concerns the party has repeatedly raised about Johannesburg’s financial collapse.
DA Gauteng leader and Leader of the Official Opposition in the Gauteng Legislature, Solly Msimanga, said residents have suffered for years because of corruption, maladministration and poor governance under ANC-led administrations.
“The Democratic Alliance Gauteng is calling on President Cyril Ramaphosa to intervene and ensure that the City of Johannesburg is placed under financial administration to save residents who have suffered enough from a lack of service delivery resulting from financial mismanagement and maladministration,” Msimanga said.
According to Msimanga, the DA has repeatedly warned that Johannesburg’s finances were unsustainable and that the city was heading toward collapse if drastic interventions were not introduced.
He said the current situation proves that previous warnings by the opposition were ignored.
“Since last year, the DA has been calling on the President to intervene and rescue the City of Johannesburg from a financial and management crisis,” he said.
The DA’s calls date back to March 2025 after President Ramaphosa visited Johannesburg and announced the establishment of a Presidential Working Group to address governance failures, financial instability and infrastructure decay ahead of the G20 Summit.
At the time, the president acknowledged the poor state of Johannesburg’s infrastructure, including deteriorating roads, water shortages, power outages and declining municipal services.
However, Msimanga said little has changed since then.
“There is nothing to show for those interventions. The city is broke and service delivery has collapsed,” he said.
In his earlier open letter to Ramaphosa, Msimanga accused successive ANC administrations of allowing corruption and incompetence to cripple Gauteng municipalities.
“Gauteng and Johannesburg find themselves in a terrible state due to the mismanagement of municipalities and the concomitant corruption by successive ANC administrations,” he wrote.
The Treasury letter also raises concerns over the city’s 2025/26 adjustment budget, which Treasury believes is unfunded.
Officials warned that Johannesburg’s revenue projections were overstated while expenditure was understated — a situation that could lead to unauthorised expenditure by the end of the financial year.
Treasury highlighted that the city had already recorded approximately R3.9 billion in over-expenditure by January 2026 on employee-related costs, electricity bulk purchases and operational expenses.
Additional concerns were raised about Johannesburg Water allegedly overestimating revenue from service charges, as well as a R708.6 million allocation linked to the Johannesburg Roads Agency that was reportedly not backed by available cash reserves.
National Treasury further criticised the city for failing to fully comply with Municipal Standard Chart of Accounts (mSCOA) regulations.
According to Treasury, Johannesburg still relies on interim financial systems that fail to meet the minimum compliance standards required under the law.
The letter states that less than 30% of applications are integrated into the city’s Enterprise Resource Planning system, affecting the accuracy and reliability of financial reporting.
Treasury warned that these weaknesses compromise oversight responsibilities and undermine the council’s ability to make informed financial decisions.
Another major concern raised by Godongwana was the city’s controversial wage agreement signed with the South African Municipal Workers Union (SAMWU) in November 2025.
The agreement commits Johannesburg to salary increases amounting to R10.3 billion over two years despite its worsening financial position.
Treasury warned that the city cannot afford the agreement and instructed officials to halt its implementation immediately.
Godongwana also warned that the National Treasury could invoke Section 216(2) of the Constitution and withhold Johannesburg’s equitable share allocation from July 2026 if the city fails to remedy the situation.
The DA said placing Johannesburg under financial administration would allow independent administrators to conduct a full assessment of the metro’s finances and redirect resources toward critical service delivery.
“If this is not done immediately, residents in the City of Johannesburg will continue to experience a decline in service delivery,” Msimanga warned.
The City of Johannesburg is expected to provide further details following Morero’s planned meeting with Treasury officials and the finance minister.
