The MEC of Finance, Nkululeko Dunga, is aware of the correspondence
between the Minister of Finance, Enoch Godongwana, and the Executive
Mayor of the City of Johannesburg, Cllr Dada Morero, regarding the
intention to stop the equitable share to the municipality due to several
transgressions of budget laws and associated regulatory instruments.
The MEC has been briefed by the Gauteng Provincial Treasury on the
state of municipal finances in Gauteng, including the City of Johannesburg,
and is aware of the serious concerns raised by the Minister of Finance.
The MEC fully appreciates the gravity of the situation and the direct impact
that deteriorating municipal finances have on service delivery,
infrastructure maintenance, payment of service providers, investor
confidence, and the daily lives of residents across Gauteng.
The concerns raised by the Minister of Finance include poor revenue
collection against budgeted targets, growing cash flow challenges and
over-expenditure pressures, failure to pay creditors within the legally
prescribed 30-day period, continued non-compliance with mSCOA
regulations, weaknesses in financial reporting systems, and concerns
regarding unfunded financial commitments which may further worsen the
financial position of the City.
These are serious matters which the Gauteng Provincial Treasury has
consistently raised with the City of Johannesburg at various
intergovernmental forums coordinated by Treasury and attended by Chief
Financial Officers of municipalities across Gauteng.
As part of the MEC’s immediate tasks under the First 100 Days
Programme, through Premier’s Coordinating Forum, will develop concrete
interventions to deal decisively with the poor state of municipal finances
across Gauteng. Attention will be given to the metropolitan municipalities,
including the City of Johannesburg, to address the concerns raised by the
Minister of Finance. These interventions will focus on improving financial
governance, revenue management, compliance with the MFMA, cash flow
management, and restoring institutional stability.
2
Through the Premier’s Coordinating Forum, and in consultation with
municipalities, organised local government, and relevant stakeholders, the
Gauteng Provincial Government will communicate a clear programme of
action to the people of Gauteng aimed at restoring municipal financial
sustainability and protecting service delivery.
The MEC is in a process of finalising consultation on the press conference
which will be announced in due course to specifically outline interventions
on the above matters mentioned.
