Johannesburg is slipping into bankruptcy

6 October 2023

The DA is deeply concerned that City of Johannesburg is about to collapse. Liquidity reports as far back as 2019 indicate a dire financial situation, officials worry about their salaries, and internal memorandums the DA is in possession of, show that the City will not be able to honour payment agreements.

While the MMC of Finance in the city, Cllr Dada Morero, goes on live television proclaiming that the City’s finances are stabilising, the internal memorandum issued, specifically advises group heads that the City Treasury Departments will determine cash outflows meaning some service providers won’t be paid. If anything, we can say with conviction, that this government does not care about liquidity, nor about the needs of residents.

These measures can only be put in place when the City is close to being bankrupt. While the MMC keeps talking about what they inherited, the Multi-party Government continuously warned that City finances have been in a dire situation. We also put measures in place to ensure that the City survives the budget shortfall we inherited – these measures have not only been ignored, but the Doomsday Coalition has gone on a spending spree.

The current government has sufficiently demonstrated that they have no plan to utilise the City property portfolio to stabilise the City Finances but would rather ensure that the Johannesburg Property Company is run by cadres. Despite National Treasury alerting the City that the budget is unfunded, the Doomsday Coalition now wants to lease a building to house city employees, where it would have been much cheaper to maintain the original one.

It pains me to say, but the next few months will be filled with:

Contractors who work on City projects will likely not get paid - they will stop working;

Service delivery like refuse collection and bylaw enforcement will become erratic; and

Whistleblowers and officials who speak up about corruption will be suspended to make way for more cadres

We have requested Section 71 reports from the MMC of Finance, and we will be scrutinising these. Furthermore, our requests for a detailed breakdown of CityPower and Joburg Water’s revenue collection remain unanswered.

Amongst other reasons, the Democratic Alliance has tabled a motion for the dissolution of Council. We ask the residents of Johannesburg to give us a fresh mandate, we need to save the economic hub of the country.

Issued by Belinda Kayser-Echeozonjoku, DA Johannesburg Caucus Leader, 6 October 2023