Finance Minister Enoch Godongwana has issued a stern warning that the City of Johannesburg is facing severe financial distress and could lose critical funding if it fails to scrap a controversial R10 billion wage agreement with the South African Municipal Workers’ Union.
In a scathing letter to the city, Godongwana indicated his intention to cut funding for the metro if Johannesburg Mayor Dada Morero does not abandon the deal. The minister’s letter noted that the adjustment budget was assessed by the National Treasury to be unfunded, with revenue collection overstated while expenditure was understated.
The warning follows mounting concerns over the metro’s financial sustainability and governance. The outstanding amount owed to creditors has increased from R17 billion in 2023 to R25.2 billion in 2025, while the city’s cash and equivalents of R3.9 billion are insufficient to repay that amount.
ActionSA Gauteng Legislature caucus leader Funzi Ngobeni said the minister’s letter confirms what the party has long been saying about the city’s unsustainable commitments and financial crisis.
“It is no longer just opposition parties raising these allegations,” Ngobeni said. “This letter from the National Treasury itself is raising an alarm about the financial position of the City of Johannesburg.”
Ngobeni noted that the letter speaks of deteriorating governance, the city’s inability to pay its creditors, and numerous transgressions of the Municipal Finance Management Act.
“That should be a concern not only to me and you, it should be a concern to every resident of Johannesburg,” he added.
Addressing the wage agreement, Ngobeni acknowledged that workers have legitimate concerns and wage disparities dating back to a 2016 agreement endorsed by the Labour Court. However, he warned that commitments made to workers must be lawful and financially sustainable.
“You can’t treat workers with dignity by promising them lies. You need to be transparent,” Ngobeni said. He accused the current administration of engaging in unlawful activities and deceiving workers.
When asked whether the city should be placed under administration and whether Mayor Morero should keep his job, Ngobeni said residents are ready to remove him democratically at the ballot box on November 4.
He also criticized the Gauteng provincial government, saying it has failed in its constitutional duty to hold local government accountable. “That layer of government needs to be looked at as well, and heads need to roll,” Ngobeni said.