Three months ago, the City of Joburg took a R3bn short-term loan to pay salaries and operational costs. It was not approved by the council and is due for repayment in June.
A December balance sheet shows more money going out than coming in and had it not been for the loan, the city would have been bankrupt.
A report on the loan was tabled in the council on February 26, the day when most of the councillors voted themselves salary increases, with mayor Dada Morero getting an extra R64,987 a year, from R1,585,052 to R1,650,039.
The vote was supported by 98 councillors from the ANC, the African Heart Congress (AHC) and the African Independent Congress (AIC). Eighty-five councillors from the DA, Freedom Front Plus and EFF voted against it, and 30 ActionSA councillors abstained.
At the meeting the financial statements for September, October, November and December were tabled. Cor Boer (Freedom Front Plus) questioned the terms of the loan and the interest rate because it was the first time councillors had seen the details.
“You cannot save a city from bankruptcy by just borrowing more money,” said Boer, who serves on the Section 79 oversight committee that monitors the executive, reports on performance and holds departments accountable. The committee had not been informed of this loan.
“The leadership of the municipality is deliberately withholding information from the Section 79 committee,” he said. “The committee met a week before the council meeting, and none of the financial reports was made available. What is the purpose of discussing a September report five months later?
“The MMC for finance [Loyiso Masuku] claims the R3bn 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, must be approved by council.”
The R3bn loan to pay operational expenses highlights the fragile state of the city’s financial position. At the end of December, this was the financial picture for some Joburg entities:
City Power: R19.6bn in the red.
Joburg Development Agency (JDA): R2bn in the red.
Joburg Social Housing Company: R2bn in the red.
Metrobus: R695m in the red.
Metropolitan Trading Company: R871m in the red.
The city spends just over R1bn more than it collects. That is why the bank balance decreased from R3.3bn at the end of November to R2.1bn at the end of December.
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. Seven of Joburg’s entities were over budget by the end of December.
December was also the halfway mark in the financial year, and financial statements show only 26% of the capital expenditure budget (meant to finance items such as new reservoirs, bridges and buildings) had been spent so far. The 2025/2026 budget is R89.4bn.
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.
You cannot save a city from bankruptcy by just borrowing more money
— Cor Boer
Boer says the city is not collecting all the revenue that is billed. The collection rate for December 2025 was only 82.7%, below the target of 88%. In November it was 80.3%.
“Nonrevenue 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,” he says.
The statements also show how much is owed to the city, with consumers owing R57.7bn, commercial enterprises owing R11.5bn and state organisations owing R2.4bn.
To try to claw back what it is owed, the city identified 4,146 electricity accounts for disconnection. These collectively owed R2.7bn. There were 2,070 accounts paid, amounting to R99m for City Power.
About 5,000 water accounts, owing R1.8bn, were identified for disconnection. Of these, 1,096 were paid, amounting to R40.6m.
Joburg 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 nonrevenue water”.
In addition, growth in the customer base remains constrained by limited water availability that continues to impede new developments, the statements say.
A major cost driver was public safety, VIP salaries and overtime pay. Additional over-expenditure was also incurred within public safety because of increased overtime during the period.
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