R8.49 billion disappeared into thin air in South Africa’s richest city

The City of Johannesburg suffered R5.7 billion in electricity losses and R2.8 billion in water losses in the last financial year.

This was revealed in the City of Johannesburg’s 2024/25 Integrated Annual Report, which was published on Thursday, 28 May 2026.

The report pointed to a city in serious financial distress. It included critical issues with liquidity and sustainability.

Another concern was that the Auditor-General issued a qualified opinion on the city’s separate financial statements.

This is because the statements could not verify R948 million in “sundry debtors” due to inadequate supporting documentation.

This was only the tip of the iceberg. There were billions in unnecessary losses and mounting irregular expenditure.

In the 2025 financial year, the City of Johannesburg incurred electricity distribution losses of R5.67 billion.

Technical losses amounted to R1.70 billion and were mainly due to energy losses during the transmission and distribution of electricity.

Non-technical losses amounted to R3.96 billion and were primarily attributable to theft and bypassing of meters.

Other factors included illegal recalibration of meters, damaged meters, faulty voltage and current transformers, billing errors, and customers without meters.

Water distribution losses amounted to R2.82 billion. Physical losses amounted to R2.03 billion and were mainly attributable to leaks on the water network infrastructure.

Commercial losses amounted to R790 million and were primarily due to illegal connections, metering inaccuracies, and billing errors.

This means the City of Johannesburg lost R8.49 billion in the 2025 financial year due to electricity and water losses.

Poor expenditure management at the City of Johannesburg

The 2025 Audit Report for the City of Johannesburg Metropolitan Municipality identified significant failures in expenditure management.

It highlighted that the municipality did not take reasonable steps to prevent large amounts of irregular, unauthorised, and wasteful spending.

The municipality disclosed R2.37 billion in irregular expenditure, caused mainly by non-compliance with the Supply Chain Management Regulations.

A total of R2.38 billion in unauthorised expenditure was incurred, primarily due to overspending on key budget votes.

The report noted R42 million in fruitless and wasteful expenditure, which was largely attributed to interest and penalties.

The city also failed to ensure that money owed was paid within the required 30-day period, in contravention of the Municipal Finance Management Act (MFMA).

The auditor found that some irregular, fruitless, and wasteful expenditures were not investigated to determine if any individual should be held liable, as required by law.

These findings indicate a failure to adhere to the MFMA, which requires the accounting officer to take all reasonable steps to prevent such expenditures.

To add fuel to the fire, the city had to write off R9.48 billion in irrecoverable trade and other receivables during the year.

Debt impairments exceeded the budget by R1.9 billion, exacerbated by high unemployment levels and more residents qualifying for indigent support.