The City of Johannesburg has moved to reassure residents and investors that its finances remain stable despite heightened scrutiny from National Treasury, with Executive Mayor Dada Morero insisting that the metro’s budget is funded and that critical services will be protected as the city works to address cash flow and governance challenges.
Addressing the media on Wednesday, Morero said the city was cooperating fully with National Treasury following the invocation of Section 216(2) of the Constitution and Section 38(1) of the Municipal Finance Management Act (MFMA), measures aimed at strengthening financial accountability.
“We have received correspondence from National Treasury that confirmed that the City’s 2026/27 Annual Budget is funded,” Morero said.
“This is comforting feedback as it confirms that our financial management is okay and has not reached a crisis state. However, more needs to be done to manage our cash flow and revenue performance.”
The mayor said ongoing engagements between the city and National Treasury, including discussions through intergovernmental structures and the Presidential Finance Working Group, were already producing positive results.
Morero revealed that the city had developed a recovery plan focused on accountability, transparency and improved financial controls. Among the immediate priorities is settling outstanding payments owed to bulk service providers.
“Rand Water and Eskom will receive their funds by mid-July,” he said.
The city has also revised its strategy to reduce unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) in line with National Treasury guidance.
According to Morero, approximately R1.8 billion in historical expenditure has already been regularised through governance processes, while a further R6.4 billion remains under consideration by municipal entity boards.
He identified City Power’s bulk electricity purchases as the biggest contributor to new overspending, amounting to R2.1 billion by the end of the third quarter.
The mayor also acknowledged financial difficulties at waste management entity Pikitup but said interventions were underway to stabilise operations.
“Waste management is an essential service, and under the Metro Trading Services Reforms Programme, funding for fleet maintenance, fuel, landfill operations and the other essentials that keep refuse trucks on the road is being ring-fenced and protected,” he said.
Morero confirmed that refuse collection operations resumed on Tuesday after disruptions linked to the entity’s cash flow constraints.
He further admitted that weaknesses remain in the city’s revenue systems.
“Our billing and revenue systems still need modernisation,” he said.
Despite the challenges, Morero stressed that residents would continue receiving essential municipal services.
“It means service delivery remains our priority, with funds recovered through improved collections and cost containment directed toward protecting water, electricity, waste, and public safety services,” he said.
The city is also pursuing infrastructure investment through external funding, including a 200 million euro (approximately R3.8 billion) facility secured from German development bank KfW for City Power infrastructure upgrades, as well as approximately R1.75 billion earmarked for Johannesburg Water capital projects.
Meanwhile, Morero warned residents to prepare for a planned Rand Water maintenance shutdown scheduled for July 17, which is expected to affect water supply across large parts of Johannesburg.
The maintenance, which will run from 7am to 7pm is expected to reduce inflows to several Johannesburg Water systems, potentially resulting in low water pressure or supply interruptions in areas including Sandton, Midrand, Randburg, Roodepoort, Soweto, Lenasia and parts of the inner city.
“I want to be honest with residents about one thing in particular: recovery will not be immediate when the maintenance ends at 7pm,” Morero said.
“Reservoirs and towers must refill before normal distribution resumes, so residents should expect recovery over the following few days.”
He urged households to store sufficient water ahead of the shutdown and to use water sparingly to assist the recovery of reservoir levels.
“Johannesburg is the economic heartland of this country. The challenges we face are real but not insurmountable,” Morero said.
“What is new is the discipline, transparency and accountability with which we are now confronting them.”
The city said it would continue providing regular updates to residents, council and National Treasury as it implements its financial recovery measures.
