Joburg mayor blames DA-led coalition as city faces R24. 4bn wasteful spending crisis

IOL News

2 days ago

Joburg Mayor Dada Morero has blamed the previous DA-led administration for the city's ballooning unauthorised, irregular, fruitless and wasteful expenditure, which has reached R24.4 billion.
Image: Timothy Bernard /Independent Newspapers
Joburg Mayor Dada Morero has blamed the previous DA-led administration for the city's ballooning unauthorised, irregular, fruitless and wasteful expenditure, which has reached R24.4 billion over the past year.
Speaking at a media briefing on Thursday, Morero confirmed he had submitted a comprehensive financial recovery plan to Finance Minister Enoch Godongwana, who had given the City of Johannesburg 14 days to respond after raising alarm over its financial mismanagement.
This comes after Auditor-General, Tsakani Maluleke, flagged serious governance failures, including poor financial controls, weak revenue collection and chronic underinvestment.
The National Treasury has cautioned that failure to resolve the crisis could result in the withholding of national grants.
Morero said he received the letter from Godongwana on July 30, 2025, outlining the minister's concern over the city's ongoing non-compliance with the Municipal Finance Management Act (MFMA), specifically relating to unauthorised and irregular expenditure.
'The Honourable Minister requested that I respond within 14 days. I can confirm that I have now submitted a comprehensive response on behalf of the City of Johannesburg,' Morero said.
The response, he said, includes a full account of the issues behind the R23.6 billion in unauthorised, irregular, fruitless and wasteful expenditure as reported in the city's 2023–2024 financial statements.
Morero, who has served as mayor since August 2022, again blamed the Democratic Alliance-led coalition, which governed the city between 2016 and 2021.
He previously served as an MMC for Finance at the metro in 2023.
'Our beloved city endured a period of mismanagement and poor leadership under the DA-led coalition. The R23.6 billion is a cumulative figure that increased progressively over several years, largely unaddressed and not regularised as required by the MFMA,' he said.
He broke down the R23.6 billion figure, which includes R13 billion (55%) in unauthorised expenditure, R9.9 billion (42%) in irregular expenditure, and R735 million (3%) in fruitless and wasteful expenditure.
Morero said most of the unauthorised spending, comes from bulk purchases of electricity and water that exceeded the approved budget.
'These bulk purchases are driven by resident consumption as well as both technical and non-technical losses during service delivery,' he said.
Irregular expenditure mainly arose from procurement processes that failed to comply with supply chain regulations.
'It's important to clarify that irregular or unauthorised expenditure doesn't necessarily mean that the goods or services weren't received. It points to non-compliance in procurement procedures,' he said.
Morero said to address these issues, he implemented key interventions including an enhanced expenditure reduction strategy focused on investigations, consequence management, and regularisation of non-compliant spending in line with MFMA Section 32.2.
He said he also re-established the city's disciplinary board for financial misconduct and initiated criminal proceedings where necessary.
'In February 2025, I approached President Cyril Ramaphosa for technical support through the Presidential Working Group,' Morero added.
He said the city also established a 'War Room' and introduced a 'Bomb Squad' to oversee financial recovery and monitor service delivery progress weekly. These interventions, he claimed, are beginning to show results.
'As of June 30, 2025, R12.9 billion of the R23.6 billion has been regularised. The balance of R6.7 billion is under investigation. The remainder has been investigated and is now being processed by municipal committees,' he said.
Morero said he expects a 'significant reduction' in irregular expenditure in the city's 2024–2025 annual financial statements.
He said the disciplinary board has completed preliminary investigations into six matters totalling R535 million, with outcomes to be presented to the Council during its next ordinary sitting.
On July 31, the Council approved 12 further matters for investigation, amounting to R2.5 billion.
These relate to alleged financial misconduct and unresolved unauthorised expenditure.
Morero also claimed there were improvements in revenue collection through the War Room initiative, with the city achieving an 87% collection rate between April and June 2025 - a 2.7% increase from the same period last year.