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The decision taken by National Treasury and the National Department of Human Settlements to cut Joburg’s Urban Settlements Development Grant (USDG) by R363 million, is a major set-back for the City’s plans. It directly impacts our ability to address towering infrastructure backlogs, revitalise the inner city and create affordable housing for some of our cities most vulnerable residents.

The USDG, is a supplementary grant used to bolster local government’s efforts to install and upgrade much needed infrastructure. Indeed, the City suffers from an inherited infrastructure backlog in the region of a ten year, unfunded R170 billion, as a result of the historical neglect by previous administrations. 

Most disappointing is the fact that a large portion of USDG is geared towards improving the living conditions of residents, with the housing department receiving the biggest chunk of the allocation to provide suitable housing for the 150 000 poor people residents on the waiting list. The demand for housing, especially when considering the missing-middle of the housing market is larger than any other City in the Country with an estimated demand of 300 000 units. 

Despite the City providing an extensive motivation on the projected spend for the 2017/18 financial year, both Human Settlements and National Treasury moved to cut the USDG funding to the City by R363 million.

These representations included critical information of projects within our service delivery pipeline that would drive expenditure in USDG.  

In considering the pattern of historical grant expenditure, as compared to previous administrations, the City has made significant strides in using grant money for providing services where they are needed most.

​In the last two financial years, quarter 3 performance has improved from 23 % spend in 2015/16 up to 36 % in the 2017/18 financial year.

The city has acknowledged that several chronic challenges which have hampered spending within the City and has put in place new monitoring tools to improve performance.

Included in the plan provided to National Treasury and Human Settlements, the City laid out its model to fast track the delivery of projects, projecting the full spending of the USDG grant by recipient departments and entities.

Comparing the City of Johannesburg's expenditure with other metros, the City has performed comparably with most metros with respect to grant spending.

JoburgTshwaneeThekwiniCape TownEkurhuleniMangaungNelson Mandela Bay
Grant allocated1 700 000 0001 600 000 0002 000 000 0001 500 000 0002 000 000 000844 000 000912 000 000
Grant spent as of 30 Dec28.8%28.7%26.1%25.4 %32,8 %38.2%37.83%

Despite this, National Treasury and the National Department of Human Settlements decided to cut this much needed grant to the City.

To say that it is disappointing that this crucial grant has now been taken away before the City could fully realise its full roll-out plan, is an understatement.

It begs the question as to why Johannesburg has been targeted in this manner, while similar spending metros are left untouched. This concern is amplified by the fact that the decision to cut funding to Johannesburg seemed to be made long before any submission from the City was called for or considered.

This decision hurts the residents of our City, who have suffered the indignity of government failure for too long, especially those most vulnerable to the crushing weight of poverty.

Cllr Funzela Ngobeni

MMC for Finance

City of Johannesburg

Media Queries:

Stan Maphologela

Director: Communications and Stakeholder Management

081 707 3196​