ActionSA backs warning over Joburg’s financial crisis

Added: 2026-05-07

[00:00:00]Let's bring you now uh more on one of our leading stories. The finance minister warning the city of Johannesburg that it is in severe financial distress. In a scathing letter to the city, Minister Ganguana has indicated his intention to cut funding for the metro if Morero fails to scrap a controversial 10 billion rand wage deal that was signed with the South African Municipal Workers Union. Well, action is weighing in on this matter. In a letter, they saying the minister's warning confirms that it has already or what it has already been saying about the city's unsustainable commitments and financial crisis. Let's speak now to action essays legislature caucus leader Funi. Mr. Gobendi, good evening to you. Thank you very much for your time. I just want to extract one passage from that minister's letter and you will hopefully sum it up for us as to how you see things. It says and I quote, "The adjustment budget was assessed uh by the was assessed by the national treasury to be unfunded.

[00:01:18]Revenue collection was overstated while expenditure was underststated.

[00:01:26]Is there any doubt in your mind that what the finance minister is saying here is is that the city of Jober is in financial distress.

[00:01:39]>> Um good evening colleague and good evening to your viewers. Um look I think uh the important thing here is that um it is no longer just um you know opposition parties raising this allegations or or this debate. I think uh this letter from the national treasury itself it's now raising an alarm about um you know the financial position that the city of of of Johannesburg finds itself and um and the minister's letter it's it's extremely serious you know um I mean if if you read it further I mean it it speaks about you know the deterioration in terms of the the governance in the in the city it talks about you know rising character measure where the city's unable to pay its creditors and uh and and and raises a number of transgressions of the of the MFMA and um and that to to us it's a should be a concern. It should be a concern not only um to me and you it should be a concern to every resident of Johannesburg.

[00:02:44]So let's talk about this agreement that the city signed with the workers because the workers of the city will tell you that they indeed are entitled to whatever increases that they have been promised. In in fact they were on this channel a little later. Mrs. Samu and they very angry so angry to a point that they are now attacking the minister forgetting that the people that they should possibly be exchanging words with are the people that promised workers this 10.3 billion rand in salary increases. What should happen with this deal?

[00:03:29]>> Yeah. and and and colle you know um our position as action from the beginning um we have been quite clear and quite consistent um we have said that we recognize that uh the workers have legitimate concerns and um and that there are wage disparities that must be addressed and and this uh this PFA was signed in 2016 you know um after a a strike uh that happened early I mean late in 2015 up until uh 2016, you know, and and and and and they do have legitimate concerns.

[00:04:06]They do have there is wage disparities in the city and and and that agreement that was signed was also endorsed by you know labor court in that that time. Um but but we have we have also warned that um commitments that are going to be made to workers must be lawful. you know, they must be financially sustainable and and and and they they should be able to uh to be honored over time. Um we we raised this concern because our concern was never you know the workers. Our concern was whether the city was making promises it could it could realistically sustain and um particularly given uh its financial position and that is why from our side you know we we reached out to South African local government bargaining council we reached out to the emater we we we reached out to to labor itself you know um we wrote a letter to the speaker to the city manager and we what we're doing we're communicating to them to say, um, let's let's be responsible in in what needs to happen because indeed we we all recognize that, you know, workers deserve um to be to be treated with dignity, but you can't treat workers with dignity by promising them lives. You need to be transparent.

[00:05:28]You need because workers do understand because they are also residents of the city of Johannesburg. And that is why they've been patient since 2016 and they've been working with governments of the day to ensure that they get what they deserve but in a sustainable way.

[00:05:43]Um this particular administration decided to to do um unlawful um activities and and and deceive the workers and that that's why we find ourselves in this position today. Well, let's finalize the conversation because uh the the viewers watching will think that gee whiz the the workers were promised over 10 billion rand and possibly that is now not going to materialize. As if that is not enough, listen to this. The outstanding amount owed to creditors has increased from the year 2023 which was an amount of 17 billion to 25.2 2 billion rand in 2025.

[00:06:28]Let's tell you how much the city has in its coffers. The city's cash and equivalent of 3.9 billion in 2024 2025 is insufficient to repay the outstanding amount to creditors of 25 billion rand.

[00:06:49]So two questions in one.

[00:06:53]Why should the city of Johannesburg not be placed under administration? But second of all, should Mr. Morero keep his job if this is the state of affairs?

[00:07:06]You know, Ky um you're correct to read all those things. You know what is deeply concerning also and what um the residents must know is that there is a contradiction between what national treasury is warning and uh and and the position taken by the Howing um MEC of COCA and and also you know the government of Heng as well you know um we were asking questions to them in the legislature you know to say the city of Johannesburg you know at that time they have not um submitted their their auditor general statements they have not um um you know accounted to the Johnsburg stock exchange and and we were we were saying what is happening who's been held accountable for all this that is happening and they were brushing this off. Um remember um there's a provincial treasury that also gave an extension for the adjustment budget to be passed. Um we should be asking you know um that layer of government as as an oversight to local government um what have they been doing and why it has to take the national minister of treasury um to really come and and and and put a stop to this because they were aware we wrote letters to them and said you know you also were a signary to the PFA in 2016.

[00:08:28]Um what what what what is your role now?

[00:08:31]because clearly the city is is is is moving in the wrong direction and somebody needs to to call them to order and um to our disappointment um you know the provincial government uh seems not to be responding in the manner that the national treasury has now responded and and in our view um that layer of government needs to be looked at as well and um and and and and heads needs to roll um because indeed um they've got a responsibility according to the constitution um to hold local government accountable where it's failing to do its duty. um they need to come in and and exercise their authority like you say putting the municipality and administration you know giving support um to the municipality and and all kinds of things that they can be able to do and and we are saying that they have failed to do that and uh and the residents of of Johannesburg you know needs to um you know look at this and uh you know as we go towards election they need to you know exercise their right in terms of of voting and ensure uh that this government doesn't come back. You asking whether you know Dadame Melo should resign. I think the resident of Johannesburg are ready to get him to resign whether he likes it or not or whether the his party is going to protect him or not. But come the 4th of November they are going to go to the ballot and be able to remove him democratically.

[00:09:52]Fonzingo Benny from Action SA.