Following what ActionSA says is National Treasury’s confirmation of a financial crisis in the City of Johannesburg (CoJ) , the party wants the municipality, the Gauteng provincial government, and all relevant stakeholders to urgently act to stabilise the City, while the Democratic Alliance (DA) has vowed accountability.

Minister of Finance Enoch Godongwana has officially declared that the CoJ is in a state of severe financial distress.

In a letter dated April 23, addressed to CoJ mayor Dada Morero, Godongwana stated that the City had become a "mark of severe financial distress", unable to meet its obligations.

The letter, which has been leaked, highlights a massive R10.3-billion wage deal with the South African Municipal Workers Union (SAMWU), which ActionSA said was unlawful and was unaffordable for the City, describing it as the core of the immediate crisis.

The City owes creditors a staggering R25.2-billion and Godongwana has directly instructed the City to halt the R10.3-billion wage deal.

ActionSA Gauteng Legislature caucus leader Funzi Ngobeni said his party recognised the 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,” he said.

Ngobeni expressed concerns that, while National Treasury was raising the alarm about severe financial distress and possible Municipal Finance Management Act transgressions, the Gauteng MEC for Cooperative Governance and Traditional Affairs recently told the provincial legislature that “the matter is resolved”.

The reality was now undeniable: the crisis was not resolved, he said.

Meanwhile, the DA said it would seek to hold all councillors who supported the wage decisions in council, personally responsible for the crisis in the municipality.

The party said it had warned of this crisis, consistently arguing in Council that the decisions leading to this point were illegal.

DA Johannesburg mayoral candidate Helen Zille said according to Godongwana’s letter, the financial situation in Johannesburg had reached a critical juncture, noting that the City was labelled functionally bankrupt owing to its inability to cover short-term liabilities.

Zille pointed out that this had translated into a collapse of basic services across Johannesburg, with the City unable to repair or maintain infrastructure, leading to persistent, long-term water and power outages.

Godongwana has issued a formal notice that if the City does not immediately "remedy this situation," the National Treasury will invoke Section 216 (2) of the Constitution.

This action would involve withholding over R8-billion in allocations under the Division of Revenue Act, which the DA warned would be "the final nail in Johannesburg’s coffin”.