Treasury deputy director-general Malijeng Ngqaleni has written to the city and proposed that a portion of the 2023/24 allocation to the city in respect of the programme and project preparation support grant (PPPSG) and urban settlement development grant (USDG) be stopped.

While other grants that would be affected include the public transport network grant (PTNG), informal settlement upgrading partnership grant (ISUPG) as well as neighbourhood development partnership grant (NDPG) as Treasury said this move was as a result of the city’s poor expenditure on the grants.

In a letter sent to the city's manager, Floyd Brink, National Treasury said, "Acting on the above, the National Treasury informs you of the intention to stop an amount of R4m from your 2023/24 PPPSG allocation of R55m, R614.1m from your 2023/24 USDG allocation of R1.5bn, R400m from your 2023/24 PTNG allocation of R1.2bn, to stop an amount of R117,2m from your 2023/24 ISUPG allocation of R715m, and to stop an amount of R17,7m from your 2023/24 NDPG allocation of R134,7 in terms of section 18 of the 2023 DoRA [Division of Revenue Act]. This decision will not in any way affect future allocations to your municipality.”

The city was also given seven days to provide reasons to Treasury why it should not halt payments for the grants as a result of underperformance/noncompliance with the Act while also motivating to the Treasury why expenditure which was reported on December 31 last year was below 45%.

The City of Johannesburg is the second metro to be served with a similar letter by Ngqaleni after Tshwane also received theirs this week for facing the possibility of losing about R629m in developmental grants funding.

The two metros in Gauteng are governed through coalitions after the 2021 municipal elections failed to produce a clear winner and both have recently been experiencing poor revenue collection from businesses and households.