Johannesburg council at odds as R25.3bn capital funding plan is rejected - IOL

The City of Johannesburg's billion-rand loan proposal failed to pass after opposition parties, led by the DA and ActionSA, blocked the vote.

Political gridlock has hindered the City of Johannesburg’s borrowing and funding plans after the council failed to secure enough votes to pass a crucial billion-rand loan proposal. 

The Johannesburg council has failed to approve the City’s proposed R25.3 billion capital funding plan for 2026/27 to 2028/29 after the ANC-led administration secured 117 votes in favour and 93 against — short of the 136-vote majority required in the 270-seat council.

The failed plan was designed to secure financial stability and fund critical infrastructure projects over a three-year period by initiating substantial borrowing. 

The proposal also aimed to back municipal entities such as City Power and Johannesburg Water in securing independent borrowing on their balance sheets.

However, both the DA and ActionSA condemned the programme, warning that the municipality was sliding toward financial collapse.

The DA expressed intense skepticism regarding the city's financial sustainability and stated it was prepared to go as far as approaching the courts to halt the borrowing process.

On the other hand, ActionSA maintained that the municipality must first prove its capacity to “borrow, spend and repay” its debts before being granted broad authorisation for further loans. 

This political standoff has left Mayor Dada Morero’s administration stuck in limbo, unable to finalise its infrastructure financing plans amid ongoing scrutiny of the metro's broader financial management. 

ANC spokesperson Mantombi Nkosi said the two parties frequently highlight Johannesburg's severe service delivery failures, such as electricity outages, water supply interruptions, potholes, and deteriorating roads, adding that this is a contradiction to publicly complaining about these issues while simultaneously blocking the financial investment explicitly designed to fix them. 

“The DA and ActionSA cannot stand before residents and complain about electricity outages, water interruptions, potholes and failing roads while opposing investment. The people of Johannesburg deserve more than political theatre.

''If the DA and ActionSA believed that the Funding Plan was financially irresponsible, where was their alternative? If they believed the city's infrastructure programme was incorrectly prioritised, what alternative infrastructure programme did they put before council?”

This pushback follows a broader pattern of resistance by opposition parties against the ANC-led coalition’s fiscal management ahead of the upcoming local government elections. 

The city is facing severe financial distress due to a massive debt burden, a controversial wage agreement, and an unfunded budget that has left cash reserves critically low.

The city owes creditors roughly R25.2bn, including massive unpaid bills to state utilities such as Eskom and water boards, while holding only about R3.9bn in cash reserves.

A two-year salary agreement signed with the South Africa Municipal Workers Union (Samwu) was deemed unaffordable and illegal by the National Treasury, triggering threats from Finance Minister Enoch Godongwana to withhold over R8bn in equitable share funding.

The National Treasury assessments also revealed an unfunded budget gap of R2.1bn, driven by overstated revenue collections and understated expenditures. The municipality also lost a staggering 45% of its water and a third of its electricity to leaks, theft, and non-payment, crippling internal cash flow.

Meanwhile, the ANC Greater Joburg region accused both the DA and ActionSA of political hypocrisy and deliberately blocking essential funding meant to fix the City of Johannesburg's crumbling infrastructure.

DA leader in Johannesburg, Belinda Kayser-Echeozonjoku said this is not about the DA opposing infrastructure, but whether council is being asked to approve billions in borrowing without councillors being given sufficient information to properly interrogate the proposal. 

Kayser-Echeozonjoku said the DA will not simply rubber-stamp a borrowing programme because the ANC-led coalition says it is for infrastructure.

“Council must know what it is approving, where the money is going, why borrowing is necessary and how residents will ultimately carry the cost. The Constitution requires municipal budgeting processes to promote transparency, accountability and effective financial management, while the MFMA exists specifically to secure sound and sustainable municipal financial management,” she said. 

Kayser-Echeozonjoku said the city’s own document shows that about R14.1bn of the three-year capital programme is funded through grants and other contributions, while approximately R10bn is funded through loans, adding that before residents are asked to carry additional debt, the ANC-led coalition should demonstrate that it has properly pursued and used all appropriate grant funding available for municipal infrastructure.

ActionSA PR councillor Mpumi Edward said her party’s concern is with the structure and scope of the plan, the assurances provided to the council, and the controls that will apply to the money and the resulting obligations. 

She said the city must demonstrate that procurement is fair and competitive, that projects are ready for implementation, that risks are properly assessed, and that there will be meaningful monitoring and public reporting.

“The standard should be clear: every rand borrowed must be accounted for, and the investment must strengthen service delivery rather than deepen financial pressure without delivering the promised results,” she said.