Treasury threatens to cut City of Joburg funding

South African Finance Minister Enoch Godongwana told Johannesburg Mayor Dada Morero that state funding to the city will be halted unless a R10.3 billion wage agreement is scrapped.

Godongwana said in a letter dated April 23 and seen by Bloomberg that the two-year pact with the South African Municipal Workers Union was signed illegally. The minister confirmed sending the letter when contacted by text message.

Read the letter here.
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“You are hereby directed to stop proceeding with the implementation of this illegally signed agreement that has the potential to destroy the sustainability of the City of Johannesburg,” Godongwana wrote.

“You very well know this city can’t afford this agreement.”

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Dada Morero, Johannesburg’s mayor. Image: Bloomberg

The threat to withhold government funding from July comes six months before municipal elections scheduled for November and adds to a litany of mismanagement and corruption scandals that have beset South Africa’s biggest city.

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The development handed a campaign issue to the Democratic Alliance, South Africa’s second-biggest political party, which is seeking to displace the African National Congress as the biggest power in the city council.

Its mayoral candidate, former party leader and ex-Cape Town Mayor Helen Zille, has called a press conference for 2 p.m. local time. Godongwana and Morero are both ANC members.

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A City of Johannesburg spokesman didn’t answer calls made to their mobile phone.

In his sharply worded letter, Godongwana listed a series of regulatory and legislative violations he says have been committed by the city of 4.8 million people.

Those include revenue targets not being met, creditors not being paid on time, and opaque city finances. He also said the city failed to address the unauthorized and wasteful expenditure that his ministry warned it about last year.

Residents of Johannesburg have had to endure years of water and power outages as well as potholed streets because of inadequate maintenance.

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