Three months ago, the City of Johannesburg took out a R3 billion short-term loan – to pay salaries and operational costs. This loan, which was not approved by council, is due in June this year.
It turns out that had it not been for the loan, the City would have been bankrupt.
The loan, and a December balance sheet that shows more money going out than coming in, highlights the precariousness of the City’s finances.
The report was tabled in Council, on 26 February. However on the same day on which this report was placed before council, the majority of the City councillors voted salary increases for themselves, with executive mayor Dada Morero getting an extra R64 987 per annum – from R1 585 052 to R1 650 039.
The vote to increase councillor salaries was supported by 98 councillors from the ANC, AHC and AIC. 85 councillors from the DA, FF+ and EFF voted against it. 30 ActionSA councillors abstained from the vote.
At the council meeting – where the financial statements for September, October, November and December were tabled – Councillor Cor Boer (FF Plus) questioned the terms of the loan and the interest rate, as it was the first time the councillors had seen the loan details.
“You cannot save a City from bankruptcy by just borrowing more money. Yes, if it was not for the loan, the City’s bank account would have been empty, and it would not have been able to even pay salaries at the end of December,” Boer said.
Boer, who serves on the council’s Section 79 oversight committee which monitors the executive, reports on performance and holds departments accountable. The committee had not been informed of this loan.
“I am convinced that the leadership of the municipality is deliberately withholding information from the Section 79 committee. The committee met a week before the council meeting and none of the financial reports were made available to us. What is the purpose of discussing a September report five months later in February?
“The MMC for Finance (Loyiso Masuku) claims that the R3 billion loan was approved by the council last year. This is not true. A three-year capital spending and loan plan was approved in council last year, but that does not give anyone a blank cheque to incur loans as and when they deem fit. Every loan, and the terms and conditions thereof, must be approved by council,” Boer says.
The R3 billion loan to pay operational expenses highlights the fragile state of the City’s financial position. At the end of December 2025, this was the financial picture for some CoJ entities:
City Power – R19,6 billion in the red.
Johannesburg Development Agency (JDA) – R2 billion in the red.
Johannesburg Social Housing Company (Joshco) – R2 billion in the red.
Metrobus – R695 million in the red.
Metropolitan Trading Company – R871 million in the red.
The City is spending just over R1 billion more than it collects in income. That is why the bank balance decreased from R 3.3 billion at the end of November to R 2.1 billion at the end of December 2025.
According to the City’s business model, key cash generators are City Power, Joburg Water, Pikitup and rates and taxes. These fund the overall operations of the City. Seven of Johannesburg’s entities were over budget by the end of December.
December was also the halfway mark in the current financial year, and financial statements show that only 26% of the capital expenditure budget (meant to finance items like new reservoirs, bridges, buildings) has been spent so far. The 2025/26 budget is R89.4 billion.
City Power has spent 39% of its budget, Joburg Water 37%, Pikitup 18%, Joburg Roads Agency 35% and Metrobus 4%. The JDA has spent 111% of its budget.
However, Boer says the City is not collecting all the revenue that is billed. The collection rate for December 2025 was only 82.7%, which is way below the target of 88%. In November it was even worse (80.3%).
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“Non-revenue water and electricity expenses are going up. The cost of buying electricity in bulk is much more than the increase in revenue from electricity. For water there is a decrease in revenue, but an increase in costs.
The statements also show just how much is owed to the city, with consumers owing R57.7 billion, commercial enterprises owe R11.5 billion and state organisations owe R2.4 billion.
To try and claw back what it is owed, the City identified 4146 electricity accounts for disconnection. These accounts collectively owed R2.7 billion. There were 2070 accounts paid up, amounting to R99 million in revenue for City Power.
More than 5000 water accounts, owing R1.8 billion, were identified for disconnection. 1096 accounts were paid up, amounting to R40.6 million in revenue for the City.
Johannesburg Water’s revenue collection was 6% below budget, which the City attributes to reduced water consumption, “likely resulting from water throttling, prevailing economic pressures, increased conservation behaviour, and persistently high levels of non-revenue water”.
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In addition, growth in the customer base remains constrained by limited water availability, which continues to impede new developments, the statements noted.
A major cost driver was public safety VIP salaries and overtime payments made to employees across the City. Additional over-expenditure was also incurred within Public Safety due to increased overtime allowances during the period.
- This story is produced by Our City News, a non-profit newsroom that serves the people of Johannesburg.
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