Helen Zille has claimed that the Johannesburg metro is effectively bankrupt after an explosive letter allegedly sent by Finance Minister Enoch Godongwana was leaked to the DA.
According to Zille, the letter addressed to Joburg mayor Dada Morero and dated 23 April revealed that the city owes creditors R25.2 billion while only holding R3.9 billion in cash and cash equivalents.
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This leaves the metro with a staggering shortfall of R21.3 billion.
Zille said: “This is the core reason behind the city’s inability to repair or maintain infrastructure, leading to consistent power and water outages and the failure to fix breakdowns, resulting in the steady collapse of service provision across the board.”
She further alleged that Godongwana warned the city had breached laws governing municipal finances, with the alleged violations carrying the “potential to destroy the sustainability of the City of Joburg beyond this term of office, as well as the negative impact on the national economy at large”.
Zille Warns R8 Billion Treasury Cut Could Be ‘Final Nail In The Coffin’
Zille claimed the finance minister issued a formal notice warning that National Treasury could invoke Section 216(2) of the Constitution if the metro failed to urgently correct its financial position.
According to her, this could result in Treasury withholding more than R8 billion allocated to the city under the Division of Revenue Act.
“This amounts to over R8 billion, which would be the final nail in Johannesburg’s coffin,” Zille said.
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She also pointed to what she described as a series of major financial setbacks suffered by the city in recent months.
Among them, she said, was the refusal by the Agence Française de Développement to approve a second R2.5 billion loan after the city allegedly failed to meet conditions tied to an earlier 2024 loan.
Zille also claimed the city’s bonds were suspended by the Johannesburg Stock Exchange for failing to submit audited annual financial statements on time.
She added that Moody’s had warned of a possible further downgrade to the city’s credit rating, while audit outcomes were also expected to worsen.
Finance Law Violations And Wage Deal Under Fire
Zille said the minister’s alleged letter listed several serious financial transgressions by the metro.
These allegedly included passing an unfunded adjustment budget in March despite warnings from Treasury, failing to comply with Municipal Standard Chart of Accounts regulations, and not preventing irregular, fruitless and wasteful expenditure.
She also claimed the city violated the Municipal Finance Management Act by failing to pay creditors within 30 days of receiving invoices.
Another key issue raised was the inclusion of a politically negotiated wage adjustment agreement in the adjustment budget.
Zille said the minister instructed the city to “stop proceeding with the implementation of this illegally signed agreement”.
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According to Zille, the DA has warned for more than three years that Johannesburg was heading toward a financial crisis.
“We have also consistently warned in council that decisions, alluded to in the minister’s letter, were unlawful and that we would pursue corrective measures under Section 32 of the MFMA,” she said.
“This means we will seek to hold all councillors who supported these illegal decision in council personally responsible for the recovery of the money lost to the city under Section 21 (1) of the MFMA, which states that ‘political office bearers or officials who deliberately or negligently permit such expenditures are personally liable’.”
Meanwhile, ANC Johannesburg regional secretary Sasa Manganye said the party would respond to both Zille’s remarks and the alleged Treasury letter.
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