South African’s Finance Minister issues final warning to richest city

South Africa

Finance Minister Enoch Godongwana has reportedly given City of Joburg mayor Dada Morero two weeks to devise a plan to stem wasteful spending or face intervention.

According to the Sunday Times, Godongwana sent a letter to Morero at the end of July, lambasting his running of the city and its budget.

Eskom was threatening to cut power to the metro, saying that over R4.9 billion was owed in municipal debt. Joburg counter-claimed more than R3 billion for irregular billing by the utility.

The matter dragged on for months, with the minister’s interventions ultimately resulting in a settlement agreement between the two that would see Joburg’s utility, City Power, pay R3.2 billion.

Under the agreement, City Power will pay Eskom R3.2 billion over four years, and in return, Eskom will waive R830 million in claims for interest, penalties, and exceeding the notified maximum demand.

While not a direct intervention, President Cyril Ramaphosa earlier this year expressed his own concerns and displeasure about the state of the city, calling for the local leadership to turn things around.

During an oversight visit in March, Ramaphosa said he was “not very pleased” with the running of the city, especially in the context of it being a host for the G20 later in the year.

He urged the mayor and his team to window dress the city to put up a good presenation for visiting G20 delegates.

With Godongwana’s reported letter, the National Treasury is now also on the city’s case, with more dire consequences hanging over its head.

Despite the state of the city and how it is being run, Morero enjoys a majority support from the Joburg council, surviving a no-confidence vote against him in June.

The second-largest party in the council, the DA, filed the motion against Morero on May 7. The vote was held on June 25, and the mayor survived with 144 votes in his favour. The council has 270 seats.

Those who voted in support of the mayor include the ANC, EFF, PA, and other smaller parties.

Action SA had supported and formed part of the coalition government up until this point. Despite being highly critical of Morero, the party abstained and consequently lost its Speaker seat in the council.