The City of Tshwane has committed to paying more than R1 billion in backdated salary increases owed to municipal workers since 2021, a deal confirmed in February 2026 that will see payments phased over three years with the lowest earners prioritised. This move follows a decision in 2022 to defer a previously agreed 3.5% salary hike due to the municipality’s financial instability.

Concerns Over Service Delivery And Financial Health

The Democratic Alliance (DA) warned that the substantial payment, while addressing outstanding wage agreements, would place further pressure on Tshwane’s strained finances. DA councillor Jacqui Uys stated: “The savings used to pay for this deal with the unions is at the expense of employing less frontline service delivery employees.” The Auditor-General reported R2.3 billion in wasteful, unauthorised, and irregular expenditure by Tshwane for the 2023/2024 financial year, and the city lost around R4 billion through unmetered or illegal water, electricity, and sewage connections.

However, the City of Tshwane insisted services would not be compromised. Mayor Nasiphi Moya said, “The settlement is supported by the 2025/26 adjustment budget currently before council. To be clear, the budget remains fully funded, with an operating surplus of R1,208,052,105.” The municipality further claims to have achieved over R2 million in monthly savings by freezing salary payments to unverified employees following an employee verification process.

Timeline Of Fiscal Challenges And Negotiated Wage Settlement

According to city records and public statements, Tshwane acknowledged a budget shortfall of at least R3 billion in October 2023 and faced ongoing revenue losses and governance issues. The 3.5% salary increase, deferred since 2022, was agreed after prolonged pressure from unions and legal arbitration. In February 2026, the city reached the phased payment agreement, aiming to settle the wage backlog by prioritising lower-income employees.

Executive Mayor Cilliers Brink, speaking on the city’s finances, stated: “We need to improve the finances of the City. If we make sufficient strides in the collection of revenue and the workforce assists us in the fight against corruption, we will reconsider our position on the non-payment of salary and wage increases.” The city’s financial challenges have heightened scrutiny on municipal management and raised questions about the ability of local governments to balance worker rights with sustainable service delivery.

The council will debate the adjustment budget and payment implementation in coming weeks, as both city officials and union leaders signal ongoing negotiations over future wage agreements and fiscal reform.