Executive Mayor Dada Morelo addressed the press to assure residents and investors of Johannesburg's financial stability, despite increased scrutiny from the National Treasury. He emphasized that the metropolis' budget is funded, and critical services will be protected during the resolution of cash flow and management issues.
Speaking on Wednesday, Morelo stated that the city is fully cooperating with the National Treasury following the application of Section 216(2) of the Constitution and Section 38(1) of the Municipal Finance Management Act (MFMA), which aim to enhance financial accountability. Morelo quoted a letter received from the National Treasury confirming that the city's Annual Budget for 2026/27 is secured by funds.
He noted that this information is encouraging as it confirms adequate financial management and the absence of a crisis. Nevertheless, he added that additional steps are required to manage revenue collection and income indicators.
Morelo detailed current interactions between the city and the National Treasury, including discussions in intergovernmental structures and the President's Finance Working Group, which have already yielded positive results. The Mayor presented a recovery plan focused on transparency, accountability, and improving financial control mechanisms. Among the priorities is settling debts owed to essential service providers.
He specified that payments to Rand Water and Eskom will be made by mid-July. Furthermore, the city has revised its strategy to reduce unauthorized, irregular, wasteful, and inefficient expenditures (UIFWE) in line with National Treasury recommendations.
According to Morelo, approximately R1.8 billion in historical expenses have been brought into compliance through management processes, and another R6.4 billion is under review by municipal enterprise boards. He identified City Power electricity procurement as the main driver of new overspending, which reached R2.1 billion by the end of the third quarter. The Mayor also acknowledged financial difficulties within the waste management company Pikitup but assured that measures are being taken to stabilize its operations.
Morelo stressed that under the metropolis' Transport Services Reform Programme, funding for fleet maintenance, fuel, landfill operations, and other necessary needs for garbage trucks is protected. He confirmed the resumption of waste collection on Tuesday after disruptions related to the organization's cash flow constraints. However, he admitted that deficiencies remain in the city's revenue collection systems that require modernization.
Despite existing challenges, Morelo highlighted that residents will continue to receive essential municipal services. He stated that service delivery remains the priority, and funds obtained through improved collections and cost reductions are directed towards protecting water supply, electricity, waste disposal, and public safety services.
The city is also attracting external funding for infrastructure investments. Specifically, for the modernization of City Power's infrastructure, a facility of €200 million (approximately R3.8 billion) has been secured from the German development bank KfW, and about R1.75 billion has been allocated for capital projects at Johannesburg Water.
Meanwhile, Morelo warned residents about a scheduled Rand Water maintenance shutdown on July 17th, which will affect water supply in a significant part of Johannesburg. The maintenance, planned from 7 am to 7 pm, may lead to reduced inflow into several Johannesburg Water systems, potentially causing low pressure or interruptions in areas including Sandton, Midrand, Randburg, Roodepoort, Soweto, Lenasia, and parts of the city center.
The Mayor frankly warned residents that recovery after the work concludes at 7 pm will not be immediate, as reservoirs and towers must be filled before normal distribution resumes. Therefore, residents should expect restoration over the next few days. He urged households to store sufficient water before the shutdown and conserve it to aid in restoring reservoir levels. Morelo concluded that Johannesburg is the country's economic hub, and while problems are real, they are surmountable, with the current situation characterized by discipline, transparency, and accountability.
