Johannesburg is not in a financial crisis, despite returning to council to request approval of a report to access a R2bn short-term loan, says mayor Mpho Phalatse.

Over the past 12 months, the city has passed an adjustment budget of R77.3bn.

However, it is experiencing “cash flow mismatches” and requires intervention to “ensure services are delivered, officials on the front line receive their salaries and service providers are paid on time,” the mayor said.

“While the city does not find itself in an immediate crisis, we may find ourselves in an uneasy state of financial affairs,” she added.

Phalatse said Covid-19 had severely affected Johannesburg's financial standing.

“People are tired of hearing it as an excuse for everything, (but) the pandemic's impact is still being felt and will continue to be felt for the foreseeable future,” she said, citing it as the reason the city struggled to attract loan funding in the 2021/2022 financial year.

“The auditor-general found many South African municipalities faced financial difficulties and irregular expenditure had reached an untenable level. The struggle to attract loan funding was not isolated to Johannesburg.

“We are affected by other municipalities' poor performance as investors tend to see all governments as a single entity.

“Despite the claims doing the rounds, the city is in a position to honour its loan repayments,” Phalatse said.

The executive is expected to again request council approve the report for a short-term loan, which it says will be repaid by June 2023. Phalatse confirmed the city had secured R2bn. All that was left was for council to approve the application.

“Taking out a short-term loan is a normal business practice employed by the City of Johannesburg, as was the case during the budgeting processes during the 2015/16, 2016/17 and 2018/19 financial years,” said the mayor.

“Therefore the disinformation by a corrupt cabal that short-term loans are unacceptable and somehow 'prove' the city is broke is unjustified and a political power play at best.”

The city confirmed it would embark on an enhanced revenue collection campaign called “Operation Buya Mthetho” to urge residents, businesses and entities to pay debts owed to it.

Phalatse said the city had written to Gauteng premier Panyaza Lesufi outlining debt owed to it by provincial departments and entities in an attempt to return money to its budget.

Meanwhile, the mayor faces a motion of no confidence at Wednesday's council meeting.

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