By Johnathan Paoli
The City of Johannesburg’s worsening financial crisis has reached a point where the national government must intervene to prevent further economic and service delivery collapse, civil society organisations have warned, arguing that the metro can no longer be relied upon to rescue or run itself.
The call comes after Johannesburg’s council spent much of its final sitting of the 2025/26 municipal financial year rushing through National Treasury-required documents in an effort to safeguard billions of rand in national funding, while continuing to grapple with a R2.1 billion unfunded budget gap, mounting debt, deteriorating infrastructure and a controversial R10.3 billion wage agreement.
The Joburg Crisis Alliance, WaterCAN and JoburgCAN said the administrative measures adopted by the council failed to address the city’s deeper structural failures.
“Without national intervention this city, which contributes 16% to the country’s nominal GDP, will continue to deteriorate and erode the value it creates for the rest of South Africa. This is a national crisis,” the organisations said in a joint statement.
The warning follows the conclusion of the city’s two-day council meeting this week, during which councillors processed only 53 of the 91 agenda items scheduled before the new municipal financial year begins on 1 July.
According to the organisations, the council prioritised reports specifically demanded by National Treasury in an attempt to retain access to national grants while the municipality remains under formal financial scrutiny.
“While the Council tabled a range of Treasury-mandated reports aimed at preserving access to national grants, these administrative exercises cannot disguise the reality facing residents: deteriorating infrastructure, worsening water and electricity services, increasing tariffs, and a municipality that remains under formal financial scrutiny,” they said.
Among the documents approved was an updated 72-page strategy aimed at preventing unauthorised, irregular, fruitless and wasteful expenditure (UIFWe), alongside a 38-page Municipal Public Accounts Committee report that formally regularised historical irregular expenditure certified as irrecoverable.
The report covers R877 million in irregular expenditure incurred between the 2010/11 and 2015/16 financial years, as well as R42 million in unauthorised expenditure accumulated between 2022/23 and 2023/24.
The expenditure included payments for catering, consultants, information technology services and locksmiths involving the Transport, Group ICT and Development Planning departments.
It also included R673 million paid to PioTrans, operator of the Rea Vaya bus system, after the company was appointed on an expedited basis because of poor planning.
In several instances, the Municipal Public Accounts Committee recommended that criminal cases be opened with the South African Police Service.
Council also considered a new Financial Turnaround Framework covering the 2026/27 to 2028/29 period, designed to restore liquidity, improve revenue collection, strengthen infrastructure delivery and improve institutional accountability.
However, the organisations questioned whether the city had the capacity or political will to implement the reforms.
“For many in the council chambers, it was a tick-box exercise and we are deeply concerned that the majority of councillors are willing to effectively condone irregular behavior,” they said.
They pointed out that although the City’s UIFWe strategy claimed to adopt “a zero-tolerance level” towards irregular expenditure, Johannesburg had already declared R3.636 billion in new unauthorised, irregular, fruitless and wasteful expenditure during the 2025/26 financial year, largely linked to budgeted bulk electricity purchases.
The organisations added that Parliament had already made clear earlier this month that regularising irregular expenditure after the fact did not amount to improved governance and did not remove the obligation to hold those responsible accountable.
Civil society also highlighted the city’s own Financial Turnaround Framework as evidence of the severity of Johannesburg’s financial position.
According to the framework, the municipality relied on a substantial short-term loan simply to survive the 2024/25 and 2025/26 financial years.
“The Framework explicitly tells us that National Treasury’s formal assessment of the 2026/27 Draft MTREF identified a R2.1 billion unfunded budget gap. Furthermore, Moody’s has placed the City’s Ba3 rating under review for possible downgrade, while the City’s sweeping arrangement sits at the centre of its structural governance failure,” the organisations said.
They argued that improving revenue collection alone would not resolve Johannesburg’s financial problems.
The statement also considered National Treasury’s Metro Trading Services Reform Programme, under which Joburg Water and City Power are scheduled to become financially ring-fenced from 1 July.
The organisations welcomed the reform but questioned whether the City would follow through.
They argued that for years the city had diverted revenue generated through electricity and water sales to subsidise other municipal operations, leaving both utilities with ageing infrastructure, inadequate capital budgets and significant financial challenges.
Johannesburg remains under pressure from Finance Minister Enoch Godongwana following a written warning that National Treasury could withhold the July equitable share payment, estimated at up to R3.6 billion, because of concerns that the city’s adjustment budget remained unfunded.
Treasury attributed much of the financial risk to the implementation of the R10.3 billion Political Facilitated Agreement with the South African Municipal Workers’ Union, which the organisations described as having been “illegally signed”.
While council has not revised either the adjustment budget or the 2026/27 budget, it appears to be relying on improved revenue collection to restore financial sustainability.
The organisations said residents deserved clarity on whether the July grant remained at risk.
They called on both the city and National Treasury to update residents on the equitable share allocation payment and to answer whether the July installment, which will likely fund services for indigent citizens, will be transferred to the city.
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