Dada Morero (left), mayor of Johannesburg, and Enoch Godongwana, minister of finance, met on Friday. (Photo: National Treasury)
Enoch Godongwana, the finance minister, and Dada Morero, the mayor of Johannesburg, met on Friday to discuss the serious concerns that the treasury has about the city’s finances.
The concern relates to the city’s financial sustainability and compliance with the Municipal Financial Management Act.
A letter that the minister had earlier sent to Morero, which states that the city owes its creditors R25.2 billion while the metro only has R3.9 billion available to do so, was leaked shortly before. In this letter, Godongwana also asks to meet with Morero.
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According to the letter, the metro’s clean-up budget, which was approved in March this year despite the National Treasury’s warnings, is unfunded.
Moreover, there is absolutely no way in which the metro can afford salary increases, the minister warned.
The treasury said after the meeting that the department has an oversight role over the financial affairs of municipalities and is obliged to intervene when it detects significant dangers for fiscal sustainability and compliance with legislation.
The meeting was therefore part of the usual and regular review by the minister and the national treasury.
“Friday’s meeting between Minister Godongwana and Mayor Morero and their respective teams of officials and technical experts was robust and productive. Discussions continue and are being handled with the urgency they deserve.”
The treasury says in its statement that the minister understands the great public interest in the issue, but that the full extent of the discussions will not be disclosed at this stage.
However, the minister assured residents of Johannesburg that the national treasury is doing everything possible to find a constructive solution in the interests of service delivery and financial sustainability.
“It was a productive meeting,” said Godongwana.
“The mayor agreed that he and his officials should go back and consider several serious remedial steps to overcome the issues we raised. They will soon submit a formal report in response to my letter.”