By Lebone Rodah Mosima
Johannesburg mayor Dada Morero said on Tuesday that the City of Joburg faces more than R8 billion in service delivery losses linked to ageing infrastructure, governance failures and budget constraints.
Speaking at a meeting with stakeholders hosted by the Standing Committee on Public Accounts (SCOPA) on the city’s audit outcomes and ongoing Special Investigating Unit (SIU) probes, Morero outlined key financial and operational challenges confronting the metro.
He noted that the Auditor-General had issued the city with an unqualified audit opinion for the financial year ended June 30, 2025, while its performance information received a qualified audit opinion.
“We understand the root causes articulated by the Auditor-General,” Morero said.
He said the city was addressing major losses at its municipal entities, including Johannesburg Water’s non-revenue water losses of 44.7%, amounting to R3.8 billion.
City Power recorded total electricity losses of 30%, comprising non-technical losses of R4 billion and technical losses of R1.7 billion, while the Johannesburg Social Housing Company (JOSCO) reported a deficit of R559 million.
Morero said the city was implementing metro trading services reforms aimed at improving accountability, financial transparency and management oversight.
The reforms are intended to address structural weaknesses that contribute to governance failures, operational inefficiencies, revenue leakages, low cash collections and limited investment capacity.
He said the city had made progress in reducing its accumulated unauthorised, irregular, fruitless and wasteful (UIFW) expenditure, with the balance falling by 44% from R23.7 billion to R13.3 billion during the 2024/25 financial year.
“This has been mainly achieved through aggressive council-approved write-offs, most notably in unauthorised expenditure, where the balance was reduced by more than 70%,” Morero said.
Despite the improvement, he warned that serious challenges remained.
The city continues to incur about R9 billion in new unauthorised expenditure annually, highlighting ongoing weaknesses in budget management.
New irregular expenditure amounted to R3.7 billion, while 1,741 matters remain under investigation.
Morero also said fruitless and wasteful expenditure rose sharply to R938 million in 2024/25, largely due to interest and penalty charges incurred by municipal entities.
The increase pointed to cash-flow pressures and poor payment discipline at entities including City Power and the Metro Trading Company, while recoveries from responsible officials had declined significantly.
“The administration remains committed to strengthening internal controls, improving budget compliance and accelerating consequence management to address the root causes of UIFW expenditure,” he said.
Morero said the city remained focused on ensuring accountability for public funds while responding to residents’ service delivery concerns across its regions.
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