Johannesburg Mayor Dada Morero is grappling with a serious financial crisis and escalating political instability as the National Treasury threatens to freeze billions in funding due to irregular spending. The city’s fragile coalition government and financial mismanagement put essential services at risk ahead of key events.
Johannesburg, South Africa’s largest city and economic hub, is currently facing an unprecedented crisis that threatens both its financial stability and political leadership. At the center of this turmoil is Mayor Dada Morero, who finds himself under intensifying pressure from the National Treasury, coalition partners, opposition parties, and auditors over the city’s precarious finances and governance.
Treasury Threatens to Freeze Funding Over Billions in Irregular Spending
The National Treasury, led by Finance Minister Enoch Godongwana, has issued a stark warning to the City of Johannesburg. In a letter dated July 30, the treasury gave Mayor Morero a deadline until mid-August to provide a credible explanation and recovery plan for unauthorized, irregular, and wasteful expenditure totaling approximately R24.4 billion (about USD 1.6 billion). This letter criticized the city for showing “little to no action” in addressing rampant financial mismanagement.
The implications of this threat are grave. Johannesburg’s total annual budget stands at roughly R89 billion, of which around R13 billion, or about 15%, depends on conditional grants from the national government. These grants primarily support vital public services and subsidize basic utilities for indigent households. Should the treasury decide to freeze or withhold these transfers, the city’s already stretched capacity to deliver services such as water, sanitation, electricity, and road maintenance could collapse entirely.
Political Fallout and Questions About City Leadership
Beyond financial woes, the treasury’s intervention has intensified questions about who is truly running Johannesburg. Critics argue that the city’s governance is increasingly influenced by unelected actors and external advisors rather than elected officials, creating a situation reminiscent of a “soft administration.”
Former Mayor Kabelo Gwamanda has openly questioned whether decisions are made by the city council or dictated by a “bomb squad“ a task team appointed by Morero in June purportedly to improve service delivery. The precise role and effectiveness of this group remain unclear, fueling concerns about transparency and accountability.
Adding to the political drama, Morero temporarily held the finance portfolio after Margaret Arnolds was elected council speaker, before handing it over to Loyiso Masuku, a former deputy regional secretary and likely contender for the ANC’s Johannesburg regional chairmanship. This internal rivalry signals deep factionalism within the ANC’s Johannesburg leadership, with smaller coalition partners demanding that the finance portfolio be awarded to one of their own as per prior agreements.
Coalition Strains: Smaller Parties Demand Finance Portfolio
Johannesburg’s coalition government is made up of the ANC and smaller parties including Al Jama-ah, the United Democratic Movement (UDM), and the African Independent Congress (AIC). These minority partners had insisted that the finance portfolio should be granted to former Mayor Thapelo Amad, a demand tied to the coalition agreement under which the ANC secured the mayoralty.
Amad served briefly as mayor in 2023 before resigning amid a looming no-confidence motion. The smaller parties argue that this arrangement must be honored, warning that failure to do so could lead to them withdrawing support for Morero’s administration. Gwamanda echoed these concerns, calling on the ANC to respect coalition agreements and avoid actions that could destabilize the fragile government.
The ANC’s regional coordinator Sasabona Manganye acknowledged the tensions but claimed the coalition agreement had effectively been met by appointing Arnolds, from the AIC, as council speaker, a role he described as more influential than the MMC finance position. Manganye also questioned the loyalty of minority partners, pointing to allegations that some, such as Al Jama-ah, had engaged in talks with opposition parties.
Despite these warnings, Morero appointed Masuku to the critical finance role, keeping the portfolio firmly within the ANC and signaling his intent to consolidate power ahead of internal party elections later this year.
Auditor-General Highlights Major Irregularities and Governance Concerns
The Auditor-General of South Africa, Tsakani Maluleke, has flagged significant irregularities in Johannesburg’s financial management. Her office identified eight material irregularities in the city’s books, highlighting a persistent absence of consequence management for officials responsible for mismanagement.
Earlier this year, the Auditor-General issued an unqualified audit report with findings that warned of Johannesburg’s deteriorating financial health. The report suggested that without urgent corrective action, the metro’s ability to provide essential services could be severely compromised.
The treasury’s ultimatum to submit a credible recovery plan is a direct response to these audit findings and is meant to compel the city to take decisive action. Failure to comply could precipitate deeper political instability and administrative dysfunction.
Opposition Voices: Democratic Alliance Warns of Service Delivery Collapse
The Democratic Alliance (DA), Johannesburg’s largest opposition party, has seized on the treasury’s warning as confirmation of longstanding concerns about financial mismanagement and governance failures. DA caucus leader Belinda Kayser-Echeozonjoku stressed that conditional grants must be strictly used for their designated purposes, and that misuse endangers the city’s ability to provide even basic services.
She warned that if the treasury pulls back or suspends these funds, the city’s ability to deliver even the limited basic services currently available will collapse entirely.
Upcoming G20 Summit Adds Pressure on City Leadership
The timing of Johannesburg’s financial and political crises is especially critical given that the city is scheduled to host the G20 summit of heads of state later this year. This international event will place the city in the global spotlight, requiring effective governance and reliable infrastructure to accommodate dignitaries and media attention.
President Cyril Ramaphosa visited Johannesburg in March and publicly criticized the state of the city, describing its service delivery as dismal with widespread issues such as pothole-ridden roads and failing municipal systems. These remarks only amplify expectations for the city leadership to urgently resolve its financial and governance challenges.
Conclusion: Johannesburg’s Crisis Demands Transparent Leadership and Fiscal Accountability
Johannesburg stands at a crossroads. The city’s enormous financial challenges, compounded by political factionalism and coalition tensions, jeopardize the delivery of essential services to millions of residents. Mayor Dada Morero’s administration faces a critical deadline to demonstrate credible plans to address irregular expenditure and restore confidence in governance.
Failure to act decisively risks the suspension of vital national funding and could plunge Johannesburg into a deeper service delivery crisis at a moment when stability is most needed. Transparent leadership, coalition cohesion, and fiscal discipline will be key to navigating this tumultuous period.
For a deeper understanding of the broader fiscal oversight frameworks impacting cities like Johannesburg, the National Treasury’s official website provides detailed resources: National Treasury South Africa.
