Treasury Letter Confirms ActionSA’s Warnings on Johannesburg Financial Crisis and Unsustainable Commitments

ActionSA notes the deeply concerning letter issued by the finance minister to the Executive Mayor of Johannesburg regarding serious financial governance failures, possible violations of the Municipal Finance Management Act (MFMA), and the worsening financial position of the City.

The contents of the letter are alarming.

National Treasury warns of deteriorating governance, ongoing non-compliance with financial regulations, severe liquidity pressures, rising creditor obligations, and commitments that the City may not be able to sustain financially.

Most notably, the Minister directly instructs the City to halt implementation of the salary agreement linked to the Politically Facilitated Agreement, warning that the City cannot afford the commitment in its current financial state.

This development confirms concerns that ActionSA Gauteng has consistently raised for months.

From the outset, ActionSA adopted a balanced and responsible position. We recognised the legitimate concerns of municipal workers and supported efforts to address long-standing wage disparities.

At the same time, we repeatedly warned that any commitments made to workers had to be lawful, properly authorised, financially sustainable, and capable of being honoured over time.

Our position has always been simple: Workers must be protected, but false promises that place both workers and the City at risk cannot be defended.

Importantly, ActionSA did not approach this matter through slogans or political opportunism. We undertook structured engagements with organised labour, engaged SALGBC, wrote formally to the MEC for CoGTA, engaged the Speaker and City Manager, communicated directly with workers, and explored possible legal avenues in the public interest.

This record demonstrates that our concerns were never anti-worker. They were grounded in governance, sustainability, and accountability.

It is therefore deeply concerning that, while National Treasury is raising the alarm about severe financial distress and possible MFMA transgressions, the Gauteng MEC for CoGTA recently told the Provincial Legislature that “the matter is resolved”. The reality is now undeniable: the crisis is not resolved.

Johannesburg residents are already experiencing the consequences of financial instability through collapsing infrastructure, unreliable service delivery, mounting governance failures, and declining public confidence in the City’s ability to manage its finances responsibly.

ActionSA calls on the City of Johannesburg, the Gauteng Provincial Government, and all relevant stakeholders to urgently act in a transparent, lawful, and financially responsible manner to stabilise the City and protect both residents and workers from further harm.

The central principle remains unchanged:

Workers deserve fairness and dignity, but financial commitments made in their name must be real, lawful, and sustainable.

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