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The City of Johannesburg will pay creditors by next week in order to have R3.6 billion of government funding reinstated and is in talks about selling bonds to fund upgrades to infrastructure, Mayor Dada Morero said.<\/p>\n
National Treasury on Tuesday withheld R13.5 billion from 69 municipalities, including Johannesburg, that are struggling to manage their finances, saying the move is intended to instil fiscal discipline, curb wasteful expenditure and hold municipal officials accountable.<\/p>\n
Read: Treasury tightens public purse on red-flagged municipalities<\/p>\n
Johannesburg plans to pay almost R2.4 billion to creditors including Rand Water and Eskom by mid-July, Morero told reporters on Wednesday.<\/p>\n
On our side, we will fully comply with the process, he said.<\/p>\n
The city is also making progress on plans to issue a bond to fund repairs to its crumbling infrastructure.<\/p>\n
Read: Johannesburg weighs bond sale to help fix broken infrastructure<\/p>\n
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CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
\u201cWe are now in discussions on the preparations that need to be done, appointing the right transaction advisors and all that stuff, but we\u2019ve got an appetite to go out to the market,\u201d Morero said.<\/p>\n
Release of withdrawn funding<\/strong><\/p>\n Earlier, National Treasury said it would release the withdrawn funding once municipalities submit plans on how they\u2019ll pay their debts.<\/p>\n \u201cOnce they give us that, we\u2019ll release a portion of the money, which is probably one-third for them to go pay those accounts, as agreed with those creditors,\u201d Ogalaletseng Gaarekwe, deputy director-general of intergovernmental relations at the Treasury, told reporters during a briefing in Pretoria.<\/p>\n The rest of the funds will be disbursed on condition the municipalities reduce unauthorised, irregular and wasteful spending by at least 25% by the end of September and make payment arrangements with creditors, among other measures, Gaarekwe said.<\/p>\n The Treasury estimates since 2021\/22, municipalities have incurred R24.1 billion in such expenditure.<\/p>\n Morero said the city will revise its strategy to curb unauthorised, irregular, fruitless and wasteful expenditure to better align with Treasury\u2019s guidance.<\/p>\n<\/blockquote>\n It will also identify the drivers of additional spending by the end of the third quarter, the largest of which is City Power\u2019s R2.1 billion overspend on bulk electricity purchases, he said.<\/p>\n Finance Minister Enoch Godongwana threatened to withdraw support to Johannesburg in May, after it agreed a deal with municipal workers that would add R10.3 billion to the city\u2019s wage bill over two years \u2014 a pact he described as illegal and unaffordable.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Read: Johannesburg faces R2.1bn funding gap as its bills mount<\/p>\n Even so, the Treasury doesn\u2019t see the withholding of funds affecting service delivery.<\/p>\n \u201cWe are not expecting it to impact service delivery, because the majority of the funding is at local government level, they raise it from their own revenue,\u201d Gaarekwe said.<\/p>\n Morero also said the city is not in a financial crisis, pointing to Moody\u2019s Ratings\u2019 recent\u00a0review,\u00a0which confirmed its Ba3 rating with a positive outlook, citing reduced risk of debt acceleration and a solid operating revenue position.<\/p>\n The move \u201cis an indication that the things that we have started putting in place are yielding results,\u201d he said. \u201cIt\u2019s an indication of confidence.\u201d<\/p>\n \u00a9\u00a02026\u00a0Bloomberg<\/p>\n<\/p><\/div>\n #Joburg #pay #R2.4bn #debt #R3.6bn #funding #reinstated<\/p>\n","protected":false},"excerpt":{"rendered":" The City of Johannesburg will pay creditors by next week in order to have R3.6 billion of government funding reinstated and is in talks about selling bonds to fund upgrades… <\/p>\n","protected":false},"author":1,"featured_media":11286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[772,1341,1487,525,12865,12866,12867],"class_list":["post-11285","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-debt","tag-funding","tag-joburg","tag-pay","tag-r2-4bn","tag-r3-6bn","tag-reinstated"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11285"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11285\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11286"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n