Enoch Godongwana, Minister of Finance. (Photo: GCIS/X)
The Johannesburg metro is financially knee-deep in trouble.
A damning letter that Enoch Godongwana, the finance minister, recently sent to Dada Morero, the mayor of Johannesburg, and which has now been leaked, confirms this.
Godongwana does not mince words in this letter, dated 23 April 2026.
In the letter, the minister points out to Morero 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 unfunded and that there is absolutely no way the metro can afford salary increases.
The minister informs Morero with the letter that if the metro is not prepared to “rectify this situation with immediate effect”, the national treasury will invoke section 216(2) of the Constitution and will withhold Johannesburg’s allocation under the Revenue Distribution Act.
The allocation amounts to more than R8 billion – money that the metro clearly badly needs.
The leaked letter. (Photo: Tania Heyns/Maroela Media)
Unfunded budget
In the letter, Godongwana reminds Morero that the Treasury has expressly warned the metro that the metro overestimates its revenue collection and underestimates its expenditure which means that its proposed adjustment budget is unfunded.
The treasury has also expressly warned that the underestimation of expenditure will lead to unauthorized expenditure by June 2026 which will put further financial pressure on the metro.
The adjustment budget was approved despite these warnings, which amounts to unauthorized expenditure – a serious breach of the law.
However, these are not the only offenses committed by the Johannesburg metro with Morero at the helm.
According to the letter, the Johannesburg metro failed to comply with the requirements of the municipal regulations on the municipal standard billing scheme.
“The City continues to experience problems with cash flow reporting,” Godongwana points out in the letter.
“Although there is an improvement compared to previous financial years, there remain significant differences, especially in relation to opening balances and cash from investment activities.”
The minister points out that inaccurate financial information negatively affects the metro council’s ability to make proper decisions about the financial affairs of the city.
Moreover, it is not only the metro that is harmed, but also the national treasury, argues Godongwana. “The situation also continues to negatively affect the national and provincial treasury’s supervisory responsibility,” he says.
Dada Morero, mayor of Johannesburg. (Photo: X)
Creditors not paid within 30 days
According to the letter, the Johannesburg metro fails to pay its creditors within 30 days of receipt of an invoice, which is a breach of the Municipal Financial Management Act.
Godongwana points out in the letter that the outstanding amount owed to creditors has risen from R17 billion in 2022-2023 to R25.2 billion in 2024-25.
The metro’s cash and cash equivalent of R3.9 billion in 2024-25 is therefore insufficient to repay its outstanding creditors of R25.2 billion.
“This is an indication of serious financial distress, indicating that the city does not have the liquidity needed to pay its creditors,” emphasizes Godongwana.
Unaffordable wage agreement
“As the metro is in financial distress, it is unclear how it intends to finance salary increases over the medium term revenue and expenditure framework (MTRF),” writes Godongwana.
This after the Johannesburg metro signed an agreement with the South African Municipal Workers’ Union (Samwu) in November in which the metro committed itself to R10.3 billion in salary increases over the next two years.
Godongwana says Morero has committed the metro to a financial obligation that is not possible to fulfill.
“An important point is that this decision is a direct violation of the Municipal Financial Management Act and budget and reporting regulations.
“You are requested to indicate what measures will be implemented and how this violation will be reversed.
“You are hereby ordered to stop proceeding with the implementation of this illegally signed agreement which has the potential to destroy the sustainability of the City of Johannesburg beyond this term of office, as well as the negative impact on the national economy in general.”