ANALYSIS: Morero chose denial over transparency about Joburg’s fiscal crisis

There can be no joy in finding the exact contradiction in a public servant’s presentation of truth-adjacent facts that folds the entire house of cards, but here we are. “We are sitting at about 12 days, which is amounting to about R2.8-billion cash coverage which allows us to be safe as the City,” Dada Morero, the latest of eight executive mayors Johannesburg has had in the Springbok coaching era of our great rugby saviour Dr Rassie Erasmus. While it sounded like a solid bar during the mayor’s 8 July media briefing, the person sitting on his right shoulder – City of Joburg finance MMC and deputy mayor Loyiso Masuku – was best placed to correct him, but didn’t. The City’s Service Delivery and Budget Implementation Plan 2026/27 scorecard mandates a target of a 30-day (read: one month) cash coverage minimum across every single quarter of the financial year to meet short-term liabilities – the absolute minimum of the 30-90 day Treasury benchmark.But if you turn to Table 19.10 (Key Financial Indicators) in the City’s approved 2026/27 Budget Book , it reveals that the city’s own approved budget officially projects a cash coverage of just 9.8 days for the 2026/27 financial year.And when Masuku tabled the 2026/27 budget, after explaining to the Speaker that the occasion of the final budget by this administration “requires candour”, she explicitly admitted to the cash constraint:“[Capital projects] can only be funded from the City’s own cash or borrowing – both severely constrained, with a cash/cost coverage ratio of only 9.8 days against a benchmark of 30-90 days.”It is not a small, but a very crucial detail that illustrates how precariously Joburg is balanced on a knife’s edge of fiscal reality.The power of optimismMorero’s deputy also used that budget speech to run the same creative playbook that he did to appease Treasury’s concerns about maintenance. “As the City of Johannesburg we are increasing the budget for maintenance and repairs from 7% to 8% in to ensure adequate resources towards critical day-to-day maintenance...”While it checks against the corresponding Budget Book projections over the 2026/27 to 2028/29 medium term, footnote 66 of the approved 2026/27 Integrated Development Plan complicates things, somewhat:“The 7.1% target reflects current budget constraints, but the 8% National Treasury benchmark is attainable. This depends on improved asset accounting, inclusion of private sector refurbishments, and leveraging partnerships. A forthcoming Council-approved Partnerships Policy will ensure co-funded infrastructure is recognised, making the 8% investment ratio both realistic and achievable.”This problem is compounded when you read through the City Power – an already struggling entity that is carrying an infrastructure backlog to the tune of R44-billion – Business Plan and discover that the maintenance budget was actually cut.“Repairs and maintenance budget is estimated at R1-billion in 2026/27, representing a decrease of approximately R531-million from approved adjustment budget 2025/26.”And it gets worse on the contracted services side…“The budget on contracted services (including repairs and maintenance) was reduced... and the overall reduction of R793-million affected the base for the 2026/27 FY budget... this will negatively affect several service delivery as follows: Reduction in planned maintenance programmes, Increased impact on unplanned maintenance, Limited responses to outages, Increased equipment breakdowns...”Shutting off the money tapPrevious Daily Maverick reporting on the holes in Morero’s version of the fiscal crisis story came before the minister of finance and director-general of the National Treasury decision to enforce Section 216(2) of the Constitution by targeting the July Equitable Share instalment.Joburg was on the list of 116 affected municipalities and had its R3.6-billion July equitable share allocation temporarily withheld on 8 July (the day of the press conference) due to failure to meet financial obligations and regularise irregular expenditure.As of 16 July, only four municipalities conformed fully and had their funds released without conditions. Seventeen municipalities (including Joburg) received only a portion of their funds strictly tied to paying bulk creditors.This directly exposes Morero’s claim that Joburg “will be paying Eskom, R1.4-billion, and Rand Water R960-million, using the incoming equitable share” as a routine, voluntary payment. The reality is that the Treasury conditionally released the funds in tranches directly to Eskom and Rand Water, bypassing the City’s central treasury sweep to prevent local politicians from diverting the cash.So when Morero boasts that “we are borrowing responsibly and strategically to fund infrastructure renewal, including a multi-year facility of €200-million – approximately about R3.8-billion – secured from the German Development Bank for City Power electrical infrastructure”, it doesn’t land as quite the flex he intends.If you’ve been counting, you’ll spot that it is only a 9% plaster on the power utility’s infrastructure wound. But in all fairness it does line up neatly with a rare moment of executive humility his deputy expressed in the budget speech:“Johannesburg cannot budget its way out of a R220-billion infrastructure backlog through municipal resources alone.”The fine margins of the City of Joburg budget transform those withheld funds into an existential crisis that only a 15% reduction in irregular expenditure (UIFWE) balances by August 2026, and an additional 15% reduction in irregular balances by September 2026, can solve – per Treasury’s rules.And fiscal survival also hinges on all creditors paying within the limits to which the cash reserves can cover. If that’s not a crisis, then what is it? DM