JOHANNESBURG, GAUTENG — The escalating Johannesburg financial crisis has taken center stage in parliamentary hearings, revealing severe capital spending shortfalls and mounting governance concerns. Executive Mayor Dada Morero recently faced intense scrutiny from SCOPA and the Cooperative Governance and Traditional Affairs committee after disclosing that the municipality utilized merely 49% of its R8.43 billion infrastructure budget by the end of March, missing the 70% benchmark.
The R10.3 Billion Wage Bill Controversy
The severe underspending exacerbates the physical decay of the city’s water and electricity networks, but the financial mismanagement extends far beyond infrastructure. During the parliamentary engagements, Mayor Morero defended a massive R10.3 billion wage agreement, arguing it was an unavoidable cost to secure short-term labor peace.
This justification, however, has been fiercely rejected by the National Finance Minister and opposition parties, including the Democratic Alliance (DA). The DA has characterized the massive allocation as a political payoff designed to buy election support rather than improve service delivery.
Professor Alex van den Heever, a governance expert at the Wits School of Governance, argues that spending money the city does not have is strictly unlawful under the Municipal Finance Management Act. He points out that the wage bill is coupled with a plan to hire nearly 2,000 additional workers without any corresponding revenue source. According to Van den Heever, these moves demonstrate a blatant disregard for proper financial governance in the country’s primary economic hub.
A R200 Billion Infrastructure Backlog and Fictitious Revenues
The municipality is currently battling a staggering R200 billion infrastructure maintenance backlog. To put this into perspective, Van den Heever contrasts this with the City of Cape Town, which has zero maintenance backlog and is directing its entire R13 billion capital budget toward building new infrastructure. Johannesburg, meanwhile, is trying to patch up decades of neglect while losing 45% of its water to leaks and 30% of its electricity to theft and system rot.
Furthermore, the city is sitting on R25 billion in unpaid debts and is actively losing money on bulk water and power purchases from Rand Water and Eskom due to a collapsing revenue collection system. Consequently, Van den Heever asserts that the city’s broader R97 billion budget is not sustainably funded, relying instead on “fictitious” revenue projections that have failed to materialize for several years.
Accounting Illusions and Unrecoverable Debts
During the hearings, it was noted that wasteful and irregular expenditure dropped by 44% to R13 billion. However, opposition MPs argue this is merely an accounting illusion. They allege the city utilized council votes to aggressively write off billions in unrecoverable debt, effectively scrubbing the balance sheet to hide potential corruption without prosecuting a single individual.
Van den Heever supports this skepticism, noting that unlike the national government, municipalities are legally prohibited from running structural deficits. By writing off debt rather than collecting it, the city is masking a severe structural deficit. He describes the municipality as being in a “financial death spiral,” warning that parliamentary oversight bodies are currently just asking for explanations rather than enforcing concrete legal accountability.
Dismissing the “Fear” Excuse for Revenue Collapse
Addressing the catastrophic failure to collect municipal revenue, Mayor Morero claimed that revenue staff are paralyzed by fear of anti-corruption investigations initiated by former Mayor Herman Mashaba.
Van den Heever dismissed this defense as “utter nonsense.” He explains that effective revenue collection relies on basic administrative machinery: functioning meters, accurate billing systems, and the timely disconnection of non-paying users—none of which are operating effectively in Johannesburg.
Ultimately, the governance expert concludes that the city’s paralysis is driven by political infighting within the ANC and its coalition partners, who are scrambling to maintain control over the city’s resources rather than governing. He warns that relying on the next electoral cycle to remove problematic leadership is a dangerously slow response to the severe economic damage being inflicted on South Africa’s most vital city.