38th Ordinary Council Confirms Financial Crisis needs Intervention

Urgent Reforms Needed to Address Johannesburg's Governance Failures

The City of Johannesburg Municipality faces a dire financial crisis, demanding urgent national intervention. Governance failures have led to deteriorating infrastructure and service issues. To protect residents and restore stability, a coordinated effort with transparent reforms is essential, addressing systemic problems and ensuring sustainable financial health.

STATEMENT SUMMARY

The joint media statement by the Joburg Crisis Alliance and partners WaterCAN and JoburgCAN, calls for urgent national intervention due to Johannesburg's critical financial situation. The city's last Council meeting of the financial year was criticized for concentrating on compliance with National Treasury demands, rather than addressing the systemic governance failures that are causing financial and infrastructural decline. While Treasury-mandated reports were tabled to maintain access to national grants, Johannesburg continues to suffer from deteriorating infrastructure, poor service delivery, and financial scrutiny.

The statement stresses that compliance does not equate to meaningful reform. At the June 24-25 Council meeting, Johannesburg passed several financial documents, including strategies to curb unauthorized expenditures and a Financial Turnaround Framework for 2026/27 to 2028/29. These documents reveal a R2.1 billion budget shortfall and the risk of a credit rating downgrade, pointing to deep-seated governance failures impacting financial sustainability and service provision.

Additionally, the statement criticizes the lack of substantive discussion on ringfencing Johannesburg Water and City Power, a key reform intended to stop these entities from subsidizing other municipal functions, an issue that has led to chronic underinvestment in infrastructure. Without transparent execution and adequate financial backing, this reform risks being ineffective.

Civil society groups are calling for clarity on whether the National Treasury's equitable share allocation is in jeopardy, citing ongoing service delivery challenges as evidence of deteriorating governance affecting residents. The statement concludes by urging coordinated national intervention to restore financial stability, rebuild public trust, and avert further service delivery breakdowns in Johannesburg, the economic hub of South Africa.

The City’s Financial Turnaround Plan can be accessed HERE