Dada Morero, the Joburg Mayor, has moved to address mounting concerns over the City of Johannesburg’s financial position after receiving a strongly worded letter from National Treasury warning of possible funding consequences if urgent corrective measures are not implemented.
The warning, issued in a letter dated 23 April 2026, raises serious concerns about the city’s financial management, debt levels and a controversial R10.3 billion wage agreement signed with municipal workers.
Treasury has cautioned that grant funding could be withheld if Johannesburg fails to stabilise its finances and improve governance systems.
The development has intensified pressure on the city’s leadership at a time when residents are already grappling with ongoing service delivery failures, deteriorating infrastructure and growing economic strain.
Joburg Mayor Responds to Treasury Concerns
Dada Morero confirmed that he received the Treasury letter last week and has since engaged with Finance Minister Enoch Godongwana regarding the issues raised.
The Joburg Mayor has now formally requested a follow-up meeting with National Treasury to discuss the concerns and outline the city’s response plan.
According to Morero, Johannesburg remains committed to transparency, accountability and responsible financial management despite the challenges it faces.
The mayor said city officials are confident they will be able to provide satisfactory explanations and corrective plans to address Treasury’s concerns.
However, the seriousness of the warning has sparked renewed debate over Johannesburg’s financial sustainability and governance practices.
This marks the second major warning from Treasury to Johannesburg in less than a year, highlighting growing frustration within national government over the metro’s financial performance.
One of the key issues raised by Enoch Godongwana involves the controversial R10.3 billion wage agreement signed between the city and the South African Municipal Workers’ Union (SAMWU).
Treasury has reportedly questioned the legality of the agreement, arguing that it may have been concluded unlawfully.
Godongwana has demanded a detailed explanation from the city and insisted that implementation of the agreement should be halted.
The two-year deal was designed to address long-standing wage disparities among municipal workers.
However, critics argue that Johannesburg’s current financial position makes such a costly agreement unsustainable.
According to Treasury’s letter, the city currently owes creditors approximately R25.2 billion while holding reserves of only R3.9 billion.
These figures have raised alarm about Johannesburg’s ability to meet its obligations while continuing to provide essential services to residents.
The city’s growing debt burden has also intensified concerns about whether infrastructure projects, maintenance programmes and service delivery initiatives may be affected.
The National Treasury warning reportedly includes the possibility of withholding up to R8 billion in grant funding if Johannesburg fails to improve financial management and governance systems.
Such a move could have major consequences for the metro’s infrastructure programmes and service delivery efforts.
Johannesburg relies heavily on national grants to support development projects, maintain infrastructure and fund critical municipal operations.
Any reduction or suspension of these funds could place additional pressure on already strained municipal finances.
The warning has also added political pressure on Dada Morero as opposition parties continue criticising the city’s governance and financial management.
Concerns over the city’s finances are expected to become a major issue ahead of the upcoming local government elections.
Residents across Johannesburg have repeatedly raised frustrations about unreliable water supply, electricity interruptions, potholes, sewer spillages and declining municipal services.
Many fear the city’s worsening financial situation could further delay efforts to repair ageing infrastructure and improve service delivery.
The South African Municipal Workers’ Union has strongly rejected Treasury’s attempt to stop the wage agreement.
SAMWU insists the deal is lawful and was the outcome of a lengthy negotiation process aimed at correcting historical wage inequalities among municipal employees.
The union argues that Treasury is interfering in collective bargaining processes and municipal labour relations.
SAMWU has also accused Treasury of acting politically, claiming the intervention favours opposition parties after previous legal challenges against the agreement failed in court.
According to the union, only a court has the authority to overturn a legally binding labour agreement.
The union further criticised Treasury for remaining silent when the Democratic Alliance attempted to block the agreement through legal channels earlier.
SAMWU maintains that municipal workers deserve fair wages and improved working conditions despite the city’s financial struggles.
The financial crisis facing Johannesburg has become one of the most pressing political and economic issues in South Africa’s largest metro.
Dada Morero now faces the difficult challenge of balancing labour demands, service delivery responsibilities and Treasury’s financial requirements.
Analysts warn that failure to resolve the dispute could deepen Johannesburg’s financial instability and damage investor confidence in the city.
At the same time, unions are likely to resist any attempts to reverse or suspend the wage agreement.
The outcome of the planned discussions between the Joburg Mayor and National Treasury could play a critical role in determining how the city navigates its growing financial crisis.
For residents, the stakes remain high.
Johannesburg’s ability to maintain infrastructure, deliver services and restore financial stability will directly affect millions of people who rely on the city every day.
