The meeting between finance minister Enoch Godongwana and Joburg mayor Dada Morero has been described as “productive” by both parties.
The duo met on Friday following a leaked letter from Godongwana to Morero raising concerns about the financial status of the city.
In the letter, Godongwana had complained, among other things, that the city’s revenue collection was misaligned with budget targets, while he also raised a red flag that the city was engaging in dangerous over-expenditure on items such as employee-related costs.
Godongwana hammered home with a protest that the city owed creditors a staggering R25-billion while it only has R4-billion cash equivalent, suggesting that the city was in fact bankrupt.
The minister further questioned how the city was going to fund its R10.3-billion commitment of wage increases to its workers unionised under trade union Samwu.
Morero said some of the issues raised by the minister were a result of miscommunication and misconceptions that were cleared during their fruitful meeting on Friday.
“The meeting went well. We were able to clarify and clear some of the issues. Some of the issues were created by miscommunication and misconceptions between the National Treasury and the city,” said Morero.
“We clarified some issues, while for others we still need to take accountability, and on others we were correct.”
Godongwana, in a statement, also described the meeting as having been “productive” but refused to go into details.
“The mayor has agreed that he and his officials must go back and consider some serious remedial actions that will address the issues that we have raised. They will soon submit a formal report to the Treasury in response to the letter that I sent,” said Godongwana.
Morero said he and his team from the city were able to clarify the issue that concerned Godongwana the most, being the R25-billion owed to creditors.
“That was the report up to the end of June 2025, but by the time you submit reports this year, you will find that the status has changed drastically,” said Morero. “Currently, we are sitting at R6.8-billion of what we owe to creditors, and 60% of it is current, which means it’s 30 days, which we have clarified to them.”
Morero said both sides acknowledged that communication breakdown might have caused some of the misunderstanding.
In the meeting, Morero got an opportunity to give political and historical context about the R10-billion wage increases deal with Samwu.
“We clarified the history of it, which dates back to 2016. We took them through it because the minister’s main concern was whether it was not going to plunge the city into financial distress,” said Morero.
“He asked how we are going to do it and whether the timelines are not too tight for the city, and we said, ‘No, the payment will always be subject to availability of budget, which is clearly contained in the agreement since 2016.’”
Morero said they explained to Godongwana that the agreement is clear: if the city does not have the necessary resources in a particular financial year, it can engage with labour on its inability to pay during that period.
The city’s team also had to answer questions on the assessment of the budget, whether it is a funded budget or not funded.
“So it was a miscommunication between the city and the National Treasury in terms of getting the reports to reflect the assessment of the budget.
“We then have to relook at the best possible way to sort out the budget assessment so that we can confirm that it is indeed a funded budget and on which assumptions.”
The two parties also reflected on the kind of technical support Treasury would give to the City going forward. It was also emphasised that the city has to ramp up its revenue collection to remain financially viable.
“We engaged cordially and soberly, and by the time the meeting ended, the minister was quite satisfied with the clarities we gave him and his team,” said Morero.
- The meeting between finance minister Enoch Godongwana and Joburg mayor Dada Morero has been described as “productive” by both parties.
- The duo met on Friday following a leaked letter from Godongwana to Morero raising concerns about the financial status of the city.
- In the letter, Godongwana had complained, among other things, that the city’s revenue collection was misaligned with budget targets, while he also raised a red flag that the city was engaging in dangerous over-expenditure on items such as employee-related costs.
- Godongwana hammered home with a protest that the city owed creditors a staggering R25-billion while it only has R4-billion cash equivalent, suggesting that the city was in fact bankrupt.
- The minister further questioned how the city was going to fund its R10.3-billion commitment of wage increases to its workers unionised under trade union Samwu.
