Note to Editors: Please find the letter here, and English and Afrikaans soundbites here, and here
The Democratic Alliance (DA) can reveal that Johannesburg is now facing the gravest financial threat in its democratic history, following a damning letter from the Minister of Finance, Enoch Godongwana, to Executive Mayor Dada Morero.
Johannesburg is barrelling towards collapse under the ANC, faster than ever before.
In this letter, the Minister confirms that Morero fails to prevent, investigate, or even attempt to recover billions in wasted money [Unauthorised, Irregular, Fruitless, and Wasteful Expenditure (UIFWE)].
The Minister’s letter is no empty threat. Johannesburg’s R89 billion budget is funded through a mix of grants, loans, revenue collection and conditional grants. Conditional grants, which form a significant portion of the City’s funding, can only be spent on what they are intended for. If Treasury pulls back or suspends these funds, as the Minister warns in his letter, the City’s ability to deliver the little basic services it is currently able to deliver, will collapse entirely.
The DA has consistently warned both the National Government and Mayor Morero about the financial rot plaguing Johannesburg, providing clear recommendations to restore fiscal discipline.
The DA has sent letters to National Treasury, outlining that those heading up key departments were not doing their jobs, and warning of a total lack of consequence management in Joburg. Leaving the ANC in Joburg to do as they please, will now come back to bite residents. We are pleased, however, to see that the Minister of Finance agreed with the DAs summation of what’s been going on in Joburg.
Irregular expenditure has ballooned to R22.2 billion and fruitless and wasteful expenditure stands at over R705 million.
When the City of Johannesburg loses in court defending unlawful and unconstitutional decisions, like their now unconstitutional VIP-Protection policy, they rack up fruitless and wasteful expenditure. Once more, something they were warned about, but now, the City refuses to tell Council how much it has lost due to its continued court losses. The DA will continue pressing for these answers.
The Minister’s letter explicitly warns that if this crisis is not urgently addressed, National Treasury will invoke Section 216(2) of the Constitution, which allows it to withhold grant funding from Johannesburg.
The ANC has proven, time and again, that it cannot govern Johannesburg responsibly. The City’s finances are in freefall, service delivery is grinding to a halt, and now the very funding that keeps Johannesburg afloat is under threat.
The truth is clear: only changing the government of Johannesburg can turn this City around. The only party able to that, is the DA. We have the track record, the expertise, and to be frank, we are the only ones with the will to do so.