JOHANNESBURG, GAUTENG — The rapidly deteriorating state of Joburg finances has pushed the national government to a critical juncture, with civil society advocates arguing that a Treasury funding freeze is now the sole remaining lever to force municipal accountability. Julia Fish, Executive Director of JoburgCan—a civil society organization operating under the Joburg Action Group—notes that while Finance Minister Enoch Godongwana’s final notice to withhold national funding will be deeply crippling for the metro, it is ultimately the only mechanism the National Treasury has at its disposal to act against the municipality.
Despite repeated assertions from the city’s mayor and leadership that the municipality is not bankrupt, recent disclosures have painted a starkly different picture of the metro’s economic reality. The city has faced intense scrutiny after appearing before Parliament and the Standing Committee on Public Accounts (SCOPA). This marks the third warning letter from the Treasury, and the Auditor-General has also intensified pressure regarding the municipality’s financial disclosures.
The severity of the cash flow crisis is already visible on the ground. MMC for Transport Kenny Kunene recently revealed that the city’s fleet has been grounded due to severe liquidity shortages. Fish emphasized that this financial collapse was not a sudden event. For years, warnings have been ignored as the revenue collection rate became completely disconnected from the actual budget. Over the past decade, municipal expenditure has doubled, rendering the budget nearly ungovernable across various departmental silos and section 79 committees. These oversight boards, which are supposed to apply the brakes on an unwieldy budget, have failed to act. Consequently, national government, business leaders, and civil society are no longer buying the city’s public narrative that the situation is being fixed.
Bloated Payrolls and Questionable Hiring
Amidst the severe cash shortages, the city’s latest budget proposes the hiring of 700 new managers. Fish criticized this move, pointing out that these are administrative office roles rather than personnel dedicated to fixing critical infrastructure like water systems or potholes.
The municipal wage bill remains the most unmanageable component of the operations budget. Currently, 30% of the city’s R90 billion operations budget is consumed entirely by staff costs. On top of this, the municipality continues to rely heavily on external contractors. Fish highlighted a glaring inefficiency: even if the city hires internal managers for departments like group legal to handle policy and implementation, they still outsource the bulk of the work to external law firms. This means the city is effectively doubling down on contractor and executive spending, making the overall staff bill completely unaffordable.
Furthermore, the productivity of the current workforce is highly questionable. According to the Auditor-General’s report, the city only achieved 40% of its service level agreement standards for the year. Fish pointed out that this metric implies at least 60% of the municipal staff are failing to perform their duties, making continued aggressive spending on personnel extraordinary.
Provincial Silence and Looming Catastrophe
A major point of frustration for civil society is the conspicuous silence of the provincial government. Fish stressed that the province was supposed to act as the first line of defense. Had there been proper governance control and oversight from the provincial level, or if the city council had simply refused to pass the budget in the first place, the situation would not have escalated to this point. The province should have intervened early, potentially by installing an administrator. Instead, provincial leadership has largely avoided the issue. During the recent water crisis, provincial teams were sent in, but they merely made noise about the lack of water rather than addressing the systemic crumbling of service delivery across the city.
Now, the potential withdrawal of national funding threatens to be catastrophic. Pulling the grants means the money will simply stop flowing into the metro. While the funds might be reassigned to other provinces or municipalities that have ready-to-go tenders, it ultimately means the money is not being spent in Johannesburg, further “unfunding” an already unfunded budget.
Because labor laws prevent the city from making massive slashes to personnel contracts, the budget cuts will inevitably fall on service delivery. Fish warned that this will result in even worse conditions across the city, effectively punishing ordinary residents and citizens rather than holding the executive, the legislature, or the provincial administration accountable.
A Plea for Managed Intervention
Ultimately, Joburg Can is pleading with the National Treasury to reconsider a total halt on grants. Instead of completely cutting off the city’s financial lifeline, Fish urged the government to implement strict, conditional oversight. The solution, she argues, is to place administrators on the ground in Johannesburg to directly manage and monitor how the funds are spent, ensuring that the city receives the money it desperately needs while bypassing the corrupt or inefficient channels that have led to the current crisis.