TREASURY WARNING: The last three paragraphs of the Finance Minister’s letter to Jhb Mayor, Dada Morero, are hugely significant…
“The City signed an agreement with the South African Municipal Workers Union (SAMWU) in November 2025 committing to R10.3 billion in salary increases over the next two years to address a wage dispute. Given that the City is in financial distress, it is unclear how it intends to fund these salary increases over the MTREF.
Taking into cognizance the current state of finances using the creditors and cash equivalents as a matrix, you have committed the City into a financial obligation that is not possible to fulfil. Of concern is that this decision is a direct transgression of MFMA and budget and reporting regulations. You are requested to indicate what measures will be implemented and how this violation will be arrested or reversed.
You are hereby directed to stop proceeding with the implementation of this illegally signed agreement that 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 at large. Secondly, not only is your Adjustments Budget not funded in terms of Section 18 of the MFMA, but you very well know the City cannot afford this agreement.”
BREAKING: Finance Minister Enoch Godongwana sends a scathing letting to Jhb Mayor, Dada Morero.
Some key issues / concerns from Treasury:
“The adjustments budget was assessed by National Treasury to be unfunded; revenue collection was overstated while expenditure was understated”
“The understating of expenditure will mostly result in unauthorised expenditure by June 2026 which will put further financial strain on the municipality.”
“The outstanding amount owed to creditors has increased from R17 billion in 2022/23 to R25.2 billion in 2024/25.”
“The city’s cash and cash equivalent of R3.9 billion in 2024/25 is insufficient to repay outstanding creditors of R25.2 billion.”
“This is a marker of severe financial distress, indicating that the city does not have the liquidity required to pay its creditors.”
Read the full letter below ⬇️