But it has come at the cost of services, as well as current and sorely needed capital investment in infrastructure, and has brought the City close to bankruptcy, according to the finance minister.<\/p>\n
Godongwana\u2019s letter laid bare that the City is, in any case, effectively bankrupt: creditors are owed R25.2-billion, while the City has R3.9-billion in cash and equivalents. It lost R12.9-billion to unauthorised expenditure in 2023\/24 (the latest official reports), while the debt-to-revenue ratio increased by 29% in 2024\/25, signalling a growing reliance on debt to sustain its operations.<\/p>\n
Godongwana instructed Morero to halt the \u201cillegally signed agreement\u201d and warned that it threatens both the City and the national economy. Johannesburg remains South Africa\u2019s financial centre, contributing 16% to 17% of GDP.<\/p>\n
![\"Ferial-Great-Joburg-Crash\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/05\/The-great-Joburg-crash_743767.jpg\" "\\"\\"")
<\/p>\n
Then Godongwana issued the clanger: he would withhold an R8-billion National Treasury grant (an equitable share grant) from Johannesburg if the mayor did not scrap the wage deal.<\/p>\n
The ANC in Johannesburg immediately wrote to Godongwana to request an urgent meeting. It wants to protect the wage deal because workers who belong to Samwu are a vital constituency.<\/p>\n
\u201cWe assure workers of the City of Johannesburg that we will engage the minister to ensure that the rights and interests of workers are protected and advanced. The struggle for salary parity within the municipality, as championed by Samwu, remains a priority of the ANC,\u201d said the party\u2019s regional secretary, Sasabona Manganye.<\/p>\n
There is no money for the deal, and to fund it, the city has taken out loans that it\u2019s having a hard time repaying.<\/p>\n
This has prompted Moody\u2019s Investor Services to warn of a ratings downgrade<\/a>, while the French Development Bank, the AFD, has refused to pony up a second loan<\/a> after the City failed to meet the terms of a R2.5-billion loan it obtained in 2024. The JSE suspended the listing<\/a> of the City\u2019s debt securities in March.<\/p>\n Budgeting on hope<\/p>\n \u201cJohannesburg is budgeting on hope, not cash,\u201d said Julia Fish, managing director of JoburgCAN, the community action network. \u201cThe City\u2019s budgets and adjustment budgets have repeatedly been built on revenue targets it is not able to meet.\u201d<\/p>\n Instead of using realistic collection data, the City keeps presenting residents with numbers it says it is working towards achieving. That is not sound budgeting, and it has left Johannesburg with a major cash-flow crisis.<\/p>\n \u201cWhen suppliers are not paid, services fail. We have seen repeated real examples, such as in the provision of water, where communities are left days, weeks and even months without a reliable source of water because of contractor non-payment,\u201d said Fish.<\/p>\n Following the publication of the finance minister\u2019s letter, Morero said he and Godongwana had met, and a formal set of engagements would be held. He did not say anything about the wage deal.<\/p>\n \u201cThe executive mayor assures residents, stakeholders, investors and the broader public that there is no cause for concern,\u201d he said. \u201cThe City acknowledges the critical oversight and governance role of the Ministry of Finance in engaging municipalities on financial stability, governance and accountability.\u201d<\/p>\n Zille\u2019s warning<\/p>\n The DA\u2019s mayoral candidate, Helen Zille, currently leading in the polls for the city, said at a press briefing on Wednesday, \u201cIn all my years in politics, I have never seen a letter quite this forthright or this blunt \u2014 particularly in warning of such devastating consequences if the stipulated actions are not taken.\u201d <\/p>\n Zille has been campaigning in Johannesburg for six months and has exposed the City\u2019s collapse.<\/p>\n \u201cIt [the letter] explains, for example, why circuit breakers cannot be replaced at substations, why there are no spare parts to fix water leaks, and why there are no ladder trucks available to repair broken street lights.\u201d<\/p>\n Johannesburg Water, City Power and the Johannesburg Roads Agency are in utility death spirals, and infrastructure collapse is palpable<\/a> in the city.<\/p>\n![\"Julia](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/05\/Water-shutdown-16_722107_cdde5576acc7b45af4dd788b7b0fc3e8.jpg\" "\\"Julia")
Julia Fish. (Photo: Meseret Argaw) <\/p>\n![\"Tumi&Naledi\/Mugabe\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/05\/IMG_6950_483809.jpeg\" "\\"Helen")
Helen Zille attends Alexandra Magistrates\u2019 Court for a site visit on 5 March. (Photo: Reitumetse Pilane) <\/p>\n