Helen Zille reacts to the leaked letter. (Photo: Tania Heyns/Maroela Media)
Helen Zille, the DA’s mayoral candidate, says she received Enoch Godongwana, the finance minister’s now leaked letter to Dada Morero, the mayor of Johannesburg, in her inbox on Wednesday morning.
“In all the years that I have been in politics, I have never come across a letter that is so blunt.”
Zille believes that this letter is unprecedented in terms of its directness and the conclusions that are drawn about the City of Gold.
Maroela Media previously reported that Godongwana points out in the letter that the City of Johannesburg currently owes its creditors R25.2 billion and that the metro currently only has R3.9 billion in cash and cash equivalents at its disposal, which means that it cannot pay outstanding creditors.
Godongwana also points out to Morero that the metro’s adjustment budget, which was approved despite the National Treasury’s warnings in March this year, is not only unfunded, but amounts to unauthorized expenditure.
“The minister puts it bluntly in the letter that the City is effectively bankrupt,” Zille said on Wednesday at a media conference in Northcliff, Johannesburg, after the letter landed in her inbox (and on social media) earlier in the day.
“What the minister basically says in the letter is that Johannesburg is bankrupt as a result of illegal decisions and actions taken by the city.
“The letter also says that there are profound consequences for those illegal decisions and actions,” says Zille, who aims to take over from Morero as mayor after November.
The leaked letter. (Photo: Tania Heyns/Maroela Media)
“This explains why no circuit breakers can be replaced at substations and why there are no parts to fix water leaks and no trucks with ladders to fix broken street lights.
“This explains why nothing can be done to reverse the collapse of services across Johannesburg.”
“This is the root cause behind the City’s inability to repair or maintain infrastructure, which leads to continued power and water outages, and the inability to fix outages, which leads to the steady collapse of service provision.”
In the letter, Godongwana threatens to withhold Johannesburg’s allocation under the Income Distribution Act if urgent action is not taken.
However, Zille warns that if the allocation of more than R8 billion is withheld, it will be the last nail in Johannesburg’s coffin.
“This will profoundly affect the entire city, especially the delivery of subsidized services to the poor.”
Zille pointed out at the media conference that the Johannesburg metro has experienced several financial setbacks in recent months.
Helen Zille reacts to the leaked letter. (Photo: Tania Heyns/Maroela Media)
The Agence Française de Développement (AFD) refused the metro’s request for a second loan of R2.5 billion because the metro did not meet the conditions attached to a previous loan granted in 2024.
The metro’s bonds were suspended by the Johannesburg Stock Exchange because the metro did not submit the audited annual financial statements on time.
Moody’s also warned of further downgrades in the metro’s credit rating.
According to Zille, the DA in Johannesburg has been warning for more than three years that the metro is headed for a major financial crisis.
“We have also consistently warned in the council that the decisions referred to in the minister’s letter are illegal.”
Zille and her party will therefore now attempt to hold all councilors who supported these allegedly illegal decisions in the council personally responsible for recovering the money lost by the metro under section 21(1) of the Municipal Financial Management Act, which states that “political office bearers or officials who intentionally or negligently allow such expenses are personally liable”.
Should Zille and her party come to power in Johannesburg after the municipal elections in November, the first task will be the drawing up of a realistically funded budget, she says.