By Levy Masiteng
The City of Johannesburg’s impaired debt is expected to surge by 41% over the next three years while nearly 30% of its operating budget will go towards staff and wages, according to the Johannesburg Community Action Network (JoburgCAN).
In a hard-hitting submission on the city’s draft 2026/27 Budget and Integrated Development Plan (IDP), JoburgCAN warned that Johannesburg risks sinking deeper into financial distress if it continues relying on overly optimistic revenue assumptions while staff costs and debt continue to escalate.
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“Our city is clearly in a precarious financial position,” said JoburgCAN managing director Julia Fish.
“The recent rebuke by Finance Minister Enoch Godongwana effectively called the 2025/26 Adjustment Budget illegal. We may be in an election year, but that does not mean the city should continue to risk another unfunded budget.”
Godongwana’s April letter to Mayor Dada Morero warned of “serious violations” of the Municipal Finance Management Act. It raised the prospect that Treasury could withhold the city’s next equitable share tranche if the problems were not addressed.
The letter also criticised the city for budgeting on revenue collection levels it was not achieving, while understating expenditure — a combination Treasury warned could worsen Johannesburg’s already strained cash position.
Fish’s criticism followed the tabling of Johannesburg’s draft 2026/27 IDP and Medium-Term Budget for public participation by the City of Johannesburg in March.
She said the city’s draft budget set a revenue collection target of 91%, despite the city’s own figures showing that collections dropped to 86% in 2024/25.
“This creates the risk of a heavy downward adjustment if current collection trends continue. The city should instead focus on adjusting upwards only if revenue enhancement measures succeed. Otherwise, the budget is effectively unfunded.”
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She said the city’s debt impairment target sits at 37%, while debt owed to the municipality for rates and services is projected to grow by 34.5% over three years.
The organisation said the impaired portion of that debt is expected to increase by 41%.
It warned that this is happening while the city’s cash coverage has deteriorated sharply, from 47.8 days in 2020/21 to just 15 days in 2024/25, well below National Treasury’s recommended minimum of 30 days.
At the same time, almost 30% of the city’s draft operating budget has been allocated to staff and wages.
Fish said the budget raises serious questions about executive remuneration and the rapid increase in senior management positions.
According to JoburgCAN, the number of senior managers is set to increase from 330 to 1 025 within two years, even as the number of “other managers” declines.
“These changes all need explanation, particularly in light of unfunded budget allegations by National Treasury and as part of the wider picture of financial strain,” Fish said.
The organisation also questioned the legal basis for salaries paid to some senior executives and heads of municipal entities.
JoburgCAN said the maximum remuneration for a municipal manager is R3 665 914, while the maximum for managers reporting directly to the municipal manager is R2 757 853.
It said the city budgets to pay the city manager R2 774 127, which is within the limit. However, the executive director: economic development is budgeted at R2 807 000, which is above the limit. The secretary to council, at R2 768 606, and the ombudsman, at R2 670 000, are also above the limit.
JoburgCAN said 12 of the heads of the city’s 13 entities are paid above the limit.
The organisation said the highest-paid figure in the draft budget is for the CEO of the Johannesburg Property Company, at R5 497 553.
However, the Johannesburg Property Company has separately rejected reports that its CEO earns R5.5 million a year, saying the figure refers to the total budget allocated to employee salaries in the office of the CEO and not his personal salary package.
Fish also raised concerns about levies and surcharges collected by the city, saying they were not clearly accounted for in the budget.
“These levies are not clearly accounted for and do not appear to be automatically transferred to the entities they are meant to support. Instead, they appear to remain in the city’s general account,” Fish said.
Among the levies highlighted by JoburgCAN are the water demand management levy, the city cleaning levy, the electricity network surcharge and a 2% surcharge on businesses and large power users.
Fish said the additional revenue collected through levies should be clearly identified in the budget, including how much is collected and whether it is directed to the relevant utility.
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“All residents see are higher prices, overpaid staff, reduced services and collapsing infrastructure. That is not a healthy social compact at all,” she added.
The criticism comes amid mounting scrutiny over Johannesburg’s finances from political parties and civil society groups.
The Democratic Alliance has also repeatedly rejected recent Johannesburg budgets, accusing the metro of prioritising wage agreements and political deals over infrastructure and service delivery.
In March, the DA said Johannesburg’s adjustment budget posed a “catastrophic risk” to the city’s financial viability and warned that escalating employee costs could “ultimately bankrupt the city”.
DA Johannesburg caucus leader Belinda Kayser-Echeozonjoku said residents expected a budget focused on fixing roads, restoring reliable electricity and improving basic services, “instead of escalating employee costs and political agreements over the needs of residents”.
The DA also criticised the city’s controversial R10 billion wage agreement with the South African Municipal Workers’ Union, arguing that it places additional pressure on an already strained budget.
Deputy mayor and finance MMC Loyiso Masuku previously said the city was reprioritising existing allocations to respond to service delivery pressures while recognising “the importance of fairly compensating employees who are at the forefront of service delivery”.
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