By Johnathan Paoli
The Gauteng Provincial Government is working urgently with the City of Johannesburg after Finance Minister Enoch Godongwana warned that National Treasury may withhold key grants if the city fails to address its worsening financial mismanagement.
Gauteng Premier Panyaza Lesufi confirmed close coordination with the metro and national authorities at media briefing on Sunday.
Lesufi disclosed that Joburg mayor Dada Morero has submitted a preliminary report, with ongoing consultations.
“The Executive Mayor is very clear, together with the bomb squad he established and the presidential team assigned to assist, they have begun addressing all the issues flagged by the Treasury. There has been meaningful progress between the last audit report and the present situation on the ground,” Lesufi said.
The letter, sent to Morero, highlights more than R24 billion in unauthorised, irregular, fruitless and wasteful expenditure in the 2023/24 financial year.
In it, Godongwana demands that Morero submit a credible recovery plan within 14 days or face national intervention, including the possible withholding of conditional grants in line with Section 216(2) of the Constitution.
According to Lesufi, the city is compiling a comprehensive response which will first be submitted to the provincial government before being forwarded to the National Treasury ahead of the deadline.
The metro, with an R89 billion annual budget, has been plagued by severe financial and service delivery challenges.
In his letter, Godongwana warned that repeated violations of the Municipal Finance Management Act, including R22 billion in irregular expenditure and R705 million in fruitless and wasteful spending, reflect deep structural and leadership failures.
Johannesburg is grappling with widespread infrastructure decay.
Over 40% of its water is lost through leaking pipes, and 35% of electricity is lost to illegal connections and theft.
Weeks-long power and water outages have become common, with parts of Sandton, set to host G20 delegates later this year, recently experiencing an eight-day water outage.
Adding to governance instability, the city has been without a Finance MMC for over a month following the resignation of Margaret Arnolds, further complicating its ability to respond to the crisis.
The Democratic Alliance (DA) in Johannesburg has reacted sharply, calling the Treasury letter the most serious warning the city has faced since 1994.
DA caucus leader Belinda Kayser-Echeozonjoku said the party had long warned of financial “rot” in the municipality and welcomed the finance minister’s intervention.
“The Executive Mayor received this letter days ago and failed to disclose it during Council sittings on 30 and 31 July. That’s unacceptable and deeply irresponsible, especially given the threat to funding that sustains basic services,” she said.
Kayser-Echeozonjoku warned that if Treasury suspends conditional grants, the city’s capital projects such as road repairs, water infrastructure, and electricity upgrades would grind to a halt, leaving residents to bear the brunt of collapsing service delivery.
As part of his turnaround strategy, Morero in June appointed a 12-member “bomb squad” led by ANC veteran Snuki Zikalala to rapidly respond to service delivery failures and provide mayoral oversight.
However, the DA has questioned the legality and effectiveness of the task team.
“There’s no legislative provision for this parallel structure. It’s been operating without transparency, and there’s no report to Council explaining how it’s funded or what progress has been made,” Kayser-Echeozonjoku said.
Earlier this year, the Auditor-General (AG) raised serious concerns about Johannesburg’s financial controls, audit outcomes, and declining revenue collection.
The lack of consequence management, poor debt recovery, and insufficient infrastructure investment were flagged as critical weaknesses undermining service delivery.
The city has also racked up costs defending unlawful decisions in court, including a controversial VIP protection policy, further contributing to its fruitless expenditure bill.
Lesufi insisted that the joint intervention between the provincial government and the city is already yielding results.
He stressed that the upcoming report to the Treasury will reflect improvements not captured in the latest audit data.
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