Deputy Finance Minister Ashor Sarupen says national government remains in close contact with the City of Johannesburg despite the emergence of a leaked letter exposing the metro’s deepening financial difficulties.
The strongly worded correspondence from Finance Minister Enoch Godongwana revealed that the municipality owes creditors R25 billion while holding only R3.9 billion in available cash reserves.
Godongwana also directed Johannesburg Mayor Dada Morero to suspend the implementation of a signed wage agreement with the South African Municipal Workers’ Union, warning that it could place further strain on the city’s finances and potentially impact the wider economy.
Treasury And Johannesburg Officials Continue Financial Recovery Talks
Sarupen said discussions between Treasury and the city have been ongoing for some time, with officials attempting to stabilise Johannesburg’s financial position.
“The Minister of Finance is engaging with the City of Johannesburg’s political leadership, but at a technical level there’s been even before, long before, consistent engagements at a technical level between the Treasury officials and the finance team in the City of Johannesburg about their finances, about their liquidity ratios, their cash aggregations, their collection rates which have been falling…and so it’s been an ongoing process to try to remediate and get the City of Johannesburg do what it’s supposed to do.”
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The leaked letter has intensified scrutiny over the financial state of South Africa’s economic hub, with concerns mounting over the municipality’s ability to meet its obligations.
Treasury’s intervention comes amid declining revenue collection rates and increasing pressure on the metro’s liquidity levels, prompting national government to work closely with city officials on corrective measures.
