South Africa

South Africa’s richest city crumbling in front of everyone’s eyes

The City of Johannesburg’s infrastructure is rapidly decaying, resulting in a major water crisis, crumbling roads, and inadequate service delivery. 

This decay, largely occurring over the past decade, was brought to prominence last year by the social media account Jozi vs Jozi

The account posted images of well-known areas in Johannesburg from 2023 and compared them to how those places looked around a decade ago, which revealed a city in decline.

Even though the account is now largely inactive, the harsh reality of Joburg’s decline continues to be felt by the city’s residents. 

What is unique about Johannesburg’s challenges is that they are largely self-inflicted, with municipal mismanagement exacerbating the city’s water scarcity. 

A general lack of maintenance accounts for the decay of the city’s roads and the non-operation of numerous traffic lights along key routes. 

The city’s water crisis is emblematic of this self-inflicted catastrophe, with demand increasing at a time when supply has remained flat.

Joburg’s water crisis has been looming for years. Little maintenance has been done on water infrastructure, and minimal planning has been done to ensure adequate supply for a growing population. 

Municipal officials, representatives from Rand Water, and Minister Pemmy Majodina have been clear that the root cause of Joburg’s water crisis is the collapse of its infrastructure. 

Majodina has repeatedly explained that there is enough water in the province’s dams and that Rand Water is drawing enough water from the Vaal River System. 

Rand Water is already abstracting the maximum amount of water it can from the Vaal River System under the licence granted to it by the Water and Sanitation Department. 

“What we are going through in Gauteng is self-inflicted pain by municipalities, where they did not do what is necessary to adequately maintain their infrastructure,” Majodina said. 

The water lost on the way from Rand Water to the end user is referred to as ‘non-revenue water’ as the city cannot bill for its use. This water is typically lost because of leaking pipes and other faulty infrastructure. 

Since 2013, non-revenue water has increased from 35% to 46.1%. Not all non-revenue water is water lost to leaks – this is just 24.1% of it. 

Unbilled authorised consumption is 12.7%. This is water supplied to informal environments and used for network maintenance. The rest, 9.4%, is ‘commercial losses’, described as illegal connections and meters.

The executive manager at WaterCAN under the Organisation Undoing Tax Abuse, Dr Ferrial Adam, explained that Joburg’s current problems are due to a crisis of leadership. 

She explained to Newzroom Afrika that a governance crisis is at the heart of Joburg’s dysfunction. Since the ANC lost control of the city in 2016, unstable coalitions have resulted in eight mayors since 2019.

The previous mayor, Kabelo Gwamanda, had not completed school and had not obtained a matric certificate. 

“The City of Johannesburg has had a revolving door of mayors that resembled a game of musical chairs,” Adam said. 

“This affects governance across all areas of the city as there can never be a clear strategy or plan to tackle key issues.”

“You are stuck floundering for quick fixes and can never get things done while opening the door for corruption and mismanagement.” 

The city is now defined by chaos, crime, and corruption, exacerbated by political infighting and incompetent public servants.

“Something urgent has to happen. The City of Johannesburg is clearly failing to tackle these issues on its own and needs the national government to step in,” she said.

While Adam called on the national government to step in, she explained that it must do so in a limited fashion to ensure it builds local capacity and prevents the same problems from arising in the future. 

She suggested that the National Treasury ringfence the grants it provides the city to ensure the funds are used for infrastructure maintenance. 

The city desperately needs these grants as its financial health has deteriorated alongside that of its infrastructure. 

Mayor Dada Morero said the city is hard at work in tackling the water crisis but is severely limited by its finances. 

“We need R1 billion just to deal with our reservoirs, with around 45 needing to be refurbished as they are leaking,” he said late last year. 

Water governance expert Professor Richard Meissner said the city’s financial issues are among the most concerning, as without adequate funding, very little can be done. 

Financial mismanagement has eroded the budget surplus South Africa’s richest city once ran, with it now having to make hard choices about where its limited money can go. 

This not only ensures the city cannot tackle its infrastructure crisis with its own funding but also makes it extremely vulnerable to external shocks, as it has no financial buffer. 

As a result, the city will have to seek additional funding from the National Treasury and potentially raise financing from private investors. 

Joburg Mayor Dada Morero

Losing top spot

The Jozi vs. Jozi account highlighted that Johannesburg wasn’t always in its current state and remains South Africa’s economic powerhouse.

The city hosts JSE Limited, Africa’s largest stock exchange and the 16th largest globally.

According to the City of Johannesburg (CoJ), it contributes 16.5% of South Africa’s GDP and employs 12% of the national workforce. Over 70% of South African companies have their headquarters in Johannesburg.

Johannesburg continues to boast the highest concentration of millionaires in Africa, with 12,300 dollar millionaires, 25 centi-millionaires, and two billionaires.

However, deteriorating infrastructure and increasing crime have prompted many wealthy residents to leave Johannesburg for the Western Cape.

The millionaire population in the city has dropped by 44% over the past decade.

Meanwhile, other wealthy hubs, particularly in the Western and Eastern Cape, are experiencing growth in their millionaire populations.

Cape Town, the biggest beneficiary of this “semigration” trend, has seen a 20% rise in its millionaire count over the last decade.

Cape Town is poised to surpass Johannesburg as Africa’s wealthiest city by 2030. Henley & Partners predicts that several major companies based in Johannesburg will have relocated their headquarters to Cape Town by then.

Johannesburg’s declining service delivery continues to drive this shift as affluent individuals seek better-managed regions.

Research by Henley & Partners and New World Wealth reveals that factors influencing millionaires’ relocation include personal safety, service delivery, and political stability.

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