Joburg's mayor revealed that government departments owe the city approximately R1 billion
City of Johannesburg Mayor Dada Morero has blamed previous administrations, particularly the DA-led coalition, for the city’s massive R23.6 billion in unauthorised, irregular, fruitless and wasteful expenditure.
Speaking at a media briefing at the Joburg Theatre on Thursday, Morero outlined the city’s comprehensive turnaround plan following concerns raised by Finance Minister Enoch Godongwana.
Finance minister’s intervention
The mayor acknowledged receiving a letter from Godongwana on 30 July 2025 expressing “significant concerns” about Johannesburg’s non-compliance with the Municipal Finance Management Act (MFMA).
In the letter, the minister cited failures to prevent and address unauthorised, irregular, fruitless and wasteful expenditure.
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Morero confirmed he submitted a response within the required 14-day deadline.
He said the response included a complete account of challenges that contributed to the R23.6 billion balance reported in the city’s 2023/24 financial statements.
Attack on previous leadership
Morero launched a scathing attack on his predecessors, blaming them for the financial crisis.
“I want to clearly state, as I publicly did when I assumed office during my first term as executive mayor in 2022, that our beloved city has endured a period of mismanagement and poor leadership from previous administrations, particularly during the DA-led coalition,” he stated.
The mayor explained that the massive expenditure represents cumulative spending that grew progressively over years.
“These expenditures were largely unaddressed and not regularised as required by the MFMA,” Morero stated.
Breakdown of Joburg’s financial irregularities
Morero broke down the R23.6 billion into different categories of financial irregularities.
“The R23.6 billion comprises R13 billion (55%) in unauthorised expenditure, R9.9 billion (42%) in irregular expenditure, and R735 million (3%) in fruitless and wasteful expenditure,” he explained.
According to the mayor, most of the unauthorised expenditure stems from bulk electricity and water purchases that exceeded approved budgets.
He explained these purchases are driven by resident consumption alongside technical and non-technical losses during service delivery.
“It is essential to note that non-compliance leading to irregular or unauthorised expenditure does not imply that the city did not receive the services or goods purchased; it indicates that there was non-compliance in the procurement process,” Morero said.
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Joburg’s turnaround strategy
To address the crisis, Morero outlined several interventions.
These include enhancing the expenditure reduction strategy and re-establishing the disciplinary board.
“In February 2025, I reached out to President Ramaphosa for technical support in the form of a Presidential Working Group. To further enhance service delivery and the achievement of the city’s turnaround plan, the ‘Bomb Squad’ was also introduced,” he said.
The mayor also revealed that he established a war room focusing on the city’s finances.
Morero reported progress in regularising the financial irregularities.
“Of the R23.6 billion reported in the City’s 2023/24 financial statements, R12.9 billion has been regularised in accordance with the MFMA,” he announced.
He said as of 30 June 2025, only R6.7 billion remains under investigation, while the rest is being processed by the relevant municipal committees.
“Based on the progress noted above, I expect the city’s [unauthorised, irregular, fruitles, and wasteful expenditure] balance to have reduced significantly when the FY2024/25 annual financial statements are presented to the auditor general,” Morero said.
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Disciplinary action underway
The mayor also gave an update on holding officials accountable for financial misconduct.
“The disciplinary board has already concluded preliminary investigations on six matters totalling R535 million and will report the outcomes to the council at its next ordinary meeting,” he said.
Morero added that on 31 July 2025, the council approved 12 additional matters worth R2.5 billion for preliminary investigations by the disciplinary board.
He took another swipe at previous administrations when discussing the board’s work.
“For the longest time, the disciplinary board was not implemented by the previous administration until we came on board and implemented it,” Morero stated.
He said last year an official resigned based on action taken by the board.
“Part of the unauthorised, irregular and fruitless wasteful expenditure we are acting on, at least around R6.7 billion, which remains under investigation and we are also committing that in the next ordinary council meeting we’ll also be presenting on the preliminary investigation of six matters totalling about R335 million,” he said.
Revenue collection improvements
The mayor reported that the war room initiative is showing results in revenue collection.
He said the city’s collection rate for April to June 2025 reached 87%, representing a 2.7% increase from the 85% rate recorded during the same period last year.
However, Morero acknowledged ongoing challenges with maintaining consistent collection rates.
“There are issues around the turnaround of finance… what is happening is that at times and some quarters we are able to reach our targets. I think that in April and May we reached 90% collection but it dived again,” he said.
The mayor expressed optimism about reaching revenue targets.
“The city’s performance in July 2025 demonstrates that the minimum average daily collection of R200 million is achievable,” he stated.
Government debt and service losses
Morero revealed that government departments owe the city significant amounts of money.
“We will be going after them so that we can recoup what is owed to the city,” he declared, noting that government departments owe approximately R1 billion.
The mayor also highlighted major losses in the water and electricity sectors.
“We are experiencing losses in the water and electricity sectors which is affecting the money that should be coming into the city,” Morero explained.
He said these losses are sitting at around 30-45% but the city is aiming to reduce them by about 10% in the current financial year.
The mayor attributed the losses to meter bypassing and illegal connections committed by both businesses and individuals.
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Transport MMC appointment pending
When questioned about the Patriotic Alliance’s (PA) proposal to appoint Liam Jacobs as transport MMC, Morero deflected the questions, saying the briefing was focused on the minister’s letter.
“At this stage I’m the acting MMC of transport until further notice,” he said.
He, however, indicated the appointment could come as early as next week.
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