City of Joburg - Newsy Today

The City of Johannesburg is facing significant scrutiny following the announcement of a R97-billion budget for the upcoming financial year. This figure marks a substantial increase from the R89-billion budget recorded last year.

Financial Discrepancies and Service Delivery Concerns

The proposed budget arrives amidst reports of deep financial instability within the city administration. Previous reports highlighted that more than R12-billion has disappeared into “irregular expenditure” without consequence.

Eskom recently stated that Johannesburg owes the utility more than R5-billion in unpaid electricity costs. This has raised urgent questions regarding where resident payments for electricity are being directed if they are not reaching the provider.

“It really confirms what my friend and fellow Joburger Ferial Haffajee said in her last newsletter, that Here’s ‘late administration looting’.”

Despite warnings from Finance Minister Enoch Godongwana regarding the city’s financial state, the administration is moving forward with a R10-billion allocation to South African Municipal Workers’ Union (Samwu) members. We find also concerns that the city is prioritizing the employment of more executives rather than investing in the repair of pipes, cables, and potholes.

Did You Know? The City of Johannesburg currently owes Eskom more than R5-billion for electricity services.

Legal Implications and Political Outlook

The current administration’s financial decisions may have a lasting impact on future leadership. Under Section 28 of the Municipal Finance Management Act, a new administration does not have the authority to completely rewrite a budget or change established charges and tariffs mid-year.

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This legal framework means that if the political landscape changes following the upcoming elections, any new administration could still be tied to the majority of this current budget. This may explain the current administration’s focus on union payouts and executive hiring, as these roles and obligations could be difficult to remove later.

The path to passing this budget remains uncertain. Because the current coalition is facing elections in a few months, internal friction could make it difficult for Deputy Mayor and Finance MMC Loyiso Masuku to secure the necessary votes in council.

Expert Insight: The decision to increase the budget while simultaneously managing massive debt to Eskom and irregular expenditure suggests a high-stakes tension between political commitments and fiscal reality. By prioritizing executive positions and union obligations, the administration may be locking in financial structures that will constrain the ability of any successor to pivot toward urgent infrastructure repairs.

Frequently Asked Questions

How much is the proposed budget for the City of Johannesburg? The budget for the forthcoming financial year is R97-billion, compared to R89-billion last year.

What is the city’s outstanding debt to Eskom? The city owes Eskom more than R5-billion.

Can a new administration easily change the current budget after an election? No. Section 28 of the Municipal Finance Management Act prevents a new administration from having carte blanche to start from scratch, meaning they may be tied to the current budget’s tariffs and charges.

How much impact will upcoming elections have on Johannesburg’s financial stability?