Gauteng Treasury steps in as Johannesburg’s financial troubles escalate

In the wake of Finance Minister Enoch Godongwana’s warning, the Gauteng Provincial Treasury has stepped in to address Johannesburg’s troubling financial crisis. AfterFinance Minister Enoch Godongwana threatenedto withhold vital national funding from the metro due to repeated violations of budgetary regulations, the Gauteng Provincial Treasury formally intervened in the worsening financial crisis at the City of Johannesburg. The intervention, led by Gauteng MEC for Finance Nkululeko Dunga, follows mounting concern over Johannesburg’s deteriorating financial position, including ballooning debt, cash flow pressures and what National Treasury describes as unlawful and unfunded expenditure commitments.

At the centre of the dispute is a controversial R10.3 billion wage agreement concluded with the South African Municipal Workers Union (Samwu), which Treasury has reportedly described as “illegally signed” and “unfunded”. Minister Godongwana has warned Johannesburg Mayor Dada Morero that the city risks losing its equitable share allocation, a key national grant relied upon to fund basic municipal services. The warning comes as Johannesburg’s finances appear to be under severe strain.

Reports indicate that the metro owes creditors approximately R25.2 billion while holding only R3.9 billion in cash and cash equivalents. Dunga’s spokesperson, Makatisha Reeva Mphulwane, said the MEC acknowledged the seriousness of the crisis and its growing impact on residents and businesses. “The MEC fully appreciates the gravity of the situation and the direct impact that deteriorating municipal finances have on service delivery, infrastructure maintenance, payment of service providers, investor confidence, and the daily lives of residents across Gauteng,” Mphulwane said.

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Treasury also raised alarm over what it described as unaffordable financial commitments that “may further worsen the financial position of the City”. Dunga, who was appointed in April as part of a provincial cabinet reshuffle, has placed Johannesburg’s financial recovery at the centre of his first 100 days in office.

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