French Development Bank Rejects Johannesburg Funding Plea Amid Governance Concerns and Unmet Loan Terms

Johannesburg's plea for fresh financing has been denied by the AFD over unmet loan terms and governance issues. Read about the city's R24.4 billion waste scandal.

By: AXL Media

Published: Apr 23, 2026, 3:41 AM EDT

Source: Information for this report was sourced from Daily Investor

The Suspension of International Development Capital

Johannesburg's efforts to secure fresh international capital have stalled following a rejection from France’s national development bank, the Agence Française de Développement (AFD). Sources familiar with the matter indicate that the denial stems from the city's inability to adhere to the governance and reporting stipulations of a R2.5 billion infrastructure loan granted in early 2024. While the AFD has confirmed it has no further financing plans for the city within the current annual cycle, the municipality maintains that it has met all contractual obligations, dismissing the lack of funding as a routine part of investor cycles.

Governance Failures and the R24.4 Billion Audit Gap

The funding rejection coincides with intense scrutiny from the National Treasury. Finance Minister Enoch Godongwana recently demanded an explanation from Mayor Dada Morero regarding the city's failure to recoup R24.4 billion in wasted funds. This fiscal mismanagement is coupled with deep-seated governance concerns that have hampered the city’s ability to provide reliable water and electricity to its 4.8 million residents. The municipal council, currently led by an ANC-headed coalition, has already faced significant internal hurdles this year, including a failed initial attempt to pass its budget due to ballooning salary costs.

High-Interest Debt and the Search for Alternative Lenders

Johannesburg’s reliance on long-term debt refinancing remains a core part of its fiscal strategy, with the city seeking approximately R2.5 billion in new loans this financial year. Previous funding from the AFD carried a floating rate as high as 4.96% above Jibar, a benchmark currently at 6.767%. To bridge the gap left by the AFD’s withdrawal, the city has approached a wide array of multilateral institutions, including the Asian Infrastructure Investment Bank and the New Development Bank, while noting that other international entities recently provided R2.5 billion at more favorable rates.