City of Johannesburg moves to address Treasury concerns after equitable share funds withheld

The City of Johannesburg says it is taking urgent steps to address concerns raised by National Treasury after the municipality was among 69 municipalities that had their July 2026 equitable share transfers withheld over financial management and fiscal compliance issues.

Speaking during a media briefing on Wednesday, Executive Mayor Dada Morero said the city is engaging with National Treasury through several intergovernmental platforms to resolve the matter and ensure compliance with all financial requirements.

Morero said discussions have also taken place through the Presidential Finance Working Group, where the city met with Finance Minister Enoch Godongwana to develop a roadmap for addressing the issues identified by Treasury.

The mayor said Johannesburg would cooperate fully with the process and provide any information required by National Treasury.

Despite the withholding of the equitable share allocation, Morero said the city had received confirmation from Treasury that its 2026/27 budget is fully funded, which he described as an indication that Johannesburg's finances are stable, although improvements are still needed in cash flow management and revenue collection.

To strengthen the municipality's financial position, Morero announced several interventions, including settling outstanding payments to Rand Water and Eskom by mid-July.

The city has also revised its strategy to reduce unauthorised, irregular, fruitless and wasteful expenditure in line with National Treasury guidelines and the Municipal Finance Management Act (MFMA) Circulars 111 and 68.

According to the mayor, expenditure amounting to R918.4 million has already been regularised following recommendations by the Municipal Public Accounts Committee after formal investigations.

In addition, the boards of the Johannesburg Roads Agency, Johannesburg City Parks and Zoo, the Johannesburg Development Agency and Pikitup collectively regularised a further R878.3 million.

Morero said the city has also identified the key causes of new unauthorised expenditure, with City Power's overspending on bulk electricity purchases emerging as the largest contributor, reaching R2.1 billion by the end of the third quarter.

The municipality is also moving to stabilise Pikitup's finances by prioritising funding to clear outstanding payments owed to service providers and restore confidence among suppliers.

In addition, the city plans to modernise its billing and revenue systems to improve revenue collection and strengthen its financial sustainability.

Morero said these measures are aimed at protecting essential municipal services, including water, electricity, waste management and public safety, while safeguarding free basic services for indigent households.

He added that Johannesburg will continue borrowing strategically to fund infrastructure upgrades, including a €200 million (about R3.8 billion) financing facility secured from the German Development Bank, KfW, for City Power's electricity infrastructure, as well as approximately R1.75 billion earmarked for Johannesburg Water capital projects over the coming years.