JOHANNESBURG, Gauteng — Johannesburg Mayor Dada Morero has successfully negotiated a path forward with National Treasury to unlock critical municipal funding, resolving a standoff over the metro’s compliance with the Municipal Finance Management Act (MFMA). The breakthrough follows a Treasury warning regarding “persistent and serious” regulatory non-compliance, despite previous interventions, guidance, and formal communications from the national government.
Speaking on the metro’s financial recovery, Morero confirmed that city officials and Treasury representatives held a highly productive dialogue just yesterday to iron out the outstanding grievances. A primary condition for the release of withheld allocations involves settling payment plans with major creditors, namely Eskom and Randwater. The Mayor noted that the city’s Group Chief Financial Officer has been in direct talks with the power utility since last week. Acknowledgement of debt letters from both entities are slated for signature by Friday at the latest. Once submitted to the national government, the transfer of due funds to the city is expected to materialize by mid-July.
Addressing the root of the Treasury’s concerns—unauthorized, irregular, fruitless, and wasteful expenditure—Morero offered a detailed breakdown of municipal accounting realities. He emphasized that unauthorized spending does not automatically equate to stolen funds; rather, it often reflects unbudgeted emergency interventions required by the city. Similarly, he explained that irregular expenditure typically points to procedural missteps in the supply chain management process, even when the actual services or goods were successfully delivered to the municipality.
To address these anomalies, a strategy regarding unauthorized expenditure was already presented to the city council two weeks ago. Furthermore, the municipality is ramping up consequence management, aligning with the South African Local Government Association’s (SALGA) strict zero-tolerance stance on financial misconduct and persistent non-compliance. SALGA has previously urged councils and accounting officers to aggressively investigate irregular spending, hold culprits accountable, and recoup lost funds.
To this end, Morero revealed that a specialized disciplinary board is actively processing these cases. Out of approximately R23 billion in flagged expenditure, the city has already managed to regularize R12 billion. An additional R700 million classified as wasteful has been handed over to the disciplinary board. The remaining balance is under intense investigation to determine negligence or procedural failures.
The disciplinary board is scheduled to present its findings and recommendations to the July city council. These reports will first be scrutinized by the Municipal Accounts Committee before final decisions are made on whether to pursue criminal charges, recover funds, or regularize the spending. Morero added that all finalized reports are also forwarded to the Auditor-General to ensure strict adherence to national audit prescripts.
On the revenue generation front, the metro is grappling with a severe collection rate drop driven by widespread unemployment and economic hardship. Morero appealed to jobless residents to register for the city’s indigent support programme (ESP), which provides relief on rates and services for those who cannot pay. For those still struggling to clear their accounts, the municipality has rolled out a debt rehabilitation initiative that offers a 50% write-off on historical debt, provided the resident commits to paying the remaining half.
The Mayor also issued a practical plea for residents to manage their utility consumption, particularly during the winter season. He suggested that households swap electrical heaters for gas alternatives or simply use blankets to keep municipal electricity bills manageable.
Furthermore, the city is battling massive revenue leaks caused by illegal electricity connections. Joint operations involving city technicians and Metro Police are conducting continuous crackdowns and disconnections. However, Morero expressed frustration over the rapid reconnections that occur within just two to three days. He also highlighted a troubling trend of meter bypasses and electricity theft occurring in affluent, gated estates, which complicates detection efforts compared to informal settlements.
Concluding his address, Morero offered a firm assurance to anxious residents that municipal service delivery will not be disrupted by the Treasury dispute. While he conceded that emergency-driven unauthorized expenditures might occasionally occur, he reiterated the city’s unwavering commitment to operating within the legal boundaries of the MFMA.
“We are committed to ensuring that we are able to run our finances much better, respond to issues of creditors, respond to issues of our customers, and maintain service delivery,” Morero stated, expressing confidence in the progress achieved with the national treasury.