Africa’s richest City broke and battered

Africa’s richest City broke and battered

Some political parties are criticising, express ing their concerns and even calling on Presi dent Cyril Ramaphosa to intervene to ensure the City of Joburg is placed under financial administration to address lack of service delivery resulting from financial mismanagement and maladministration.

This after leaked letters from Minister of Finance Enoch Godongwana to the city surfaced last week. Joburg mayor Dada Morero confirmed his office had received the letter from the minister last week and added that he immediately spoke with the minister on Friday about it.

“We agreed to have a formal engagement between ourselves and the minister so we can clear some of the issues raised in the letter,” he said. “It must be made clear that the minister has the responsibility from time to time to engage with municipalities, in particular on issues that relate to the management of finances,” Morero said.

A troubled City

Residents had no reason to panic, and the city was in control and would give a satisfactory response to the minister.

DA City of Joburg caucus leader Belinda Kayser-Echeozonjoku said placing the city under full administration in the current environment is unlikely to assist and could potentially worsen the situation.

“However, as Helen Zille [the party’s mayoral candidate for Johannesburg] mentioned during a press briefing, the minister raised serious concerns regarding the financial risks highlighted by the group chief financial officer in the adjustment budget,” Kayser-Echeozonjoku said.

“We have already seen the negative consequences during the administration of the City of Tshwane, where significant looting and governance failures occurred. “A similar approach could leave Johannesburg in an even worse state of collapse than it currently faces,” she added.

Kayser-Echeozonjoku said that if there were a legally permissible form of financial administration directly overseen by the National Treasury, rather than the Gauteng provincial government, such an intervention could help stop large-scale looting and restore financial discipline and accountability within the city.

A warning from opposition parties

Freedom Front Plus (FF Plus) councillor Franco de Lange said they warned the city’s ANC administration that exorbitant salary negotiations and a culture of non-payment would steer the city straight into bankruptcy.

“These warnings fell on deaf ears, though, and the consequences are now evident,” said De Lange.

“The controversial R10.3 bil lion salary increase offered to workers last year to avert labour action ahead of the G20 Summit was a turning point.

“At the time, the FF Plus warned implementing such a decision would not only undermine the city’s short-term liquidity, but also its long-term sustainability,” he added.

De Lange said that the out standing metro debt stood at R70 billion, with Soweto responsible for the largest portion. “While collection rates in the suburbs are above 88%, Soweto’s rate remains at only 40% to 50% – a culture of non-payment that the ANC has allowed to flourish over many years. “In addition, the Gauteng government still owes the city about R1.4 billion,” De Lange added.

ActionSA Gauteng legislature caucus leader Funzi Ngobeni said the party was deeply concerned by the letter issued by Godongwa na to Morero regarding serious financial governance failures, possible violations of the Municipal Finance Management Act, and the worsening financial position of the city, adding that the contents of the letter are alarming. “National Treasury warns of deteriorating governance, ongoing non-compliance with financial regulations, severe liquidity pressures, rising creditor obligations and commitments that the city may not be able to sustain financially,” added Ngobeni. “Most notably, the minister directly instructs the city to halt implementation of the salary agreement linked to the Political ly Facilitated Agreement, warning that the city cannot afford the commitment in its current financial state,” he added. DA Ekurhuleni mayoral candidate Khathutshelo Ra Silingwane recently also laid a complaint with the public protector, Advocate Kholeka Gcaleka, calling for a full and urgent investigation into serious corruption allegations in the City of Ekurhuleni. – [email protected]