South Africa’s richest province running out of money

The province of Gauteng is in serious financial trouble, with Finance MEC Lebogang Maile saying it faces a liquidity crisis if it does not use its resources more efficiently. 

Maile issued this warning when presenting the province’s Medium-Term Expenditure Framework (MTEF) Budget on 18 March 2025. 

South Africa’s economic hub is expected to spend R527.2 billion over the next three years to revive the provincial economy. 

Despite this growing budget, Maile warned that the province is under severe financial pressure and proposed implementing compulsory baseline reductions across all departments to address the province’s budget deficit. 

“Liquidity pressures are escalating, with net cash balances projected to turn negative by the 2025/26 financial year,” Maile said.

The MEC called on all departments to follow the spending constraints and align their expenditure with the 2024-29 Medium-Term Development Plan. 

“Failure to act decisively – through expenditure oversight, keeping the overall wage bill under control and exploring alternative funding models – will risk deepening the liquidity crisis,” he said. 

He warned that such a crisis would threaten service delivery across the province and expose South Africa’s economic hub to significant risks. 

Gauteng contributes almost 40% to the national GDP but remains dogged by high unemployment, violent crime, and deteriorating infrastructure. 

To add to the province’s woes, it has also been saddled with R20 billion in debt from the failed e-toll system. It paid its first instalment of R3.8 billion to SANRAL in September 2024. 

Maile echoed Finance Minister Enoch Godongwana’s concerns about the inefficiencies incremental budget growth causes in government. 

Over time, budgets tend to grow incrementally by carrying forward historical allocations without reflecting the changing needs of citizens. 

This creates inefficiencies, misalignments, and wasteful spending. Oftentimes, the best outcome is spending that does not yield the desired impact. 

Gauteng under fire

South Africa’s richest province has come under fire from all quarters in recent weeks, with President Cyril Ramaphosa urging officials to resolve a myriad of problems dogging the city ahead of the G20 Summit in November. 

Africa’s richest urban centre has experienced years of mismanagement, with power changing hands between shifting coalitions.

Residents contend with crumbling roads and other infrastructure, water and electricity outages, a lack of basic services, and rampant violent crime.

“The environment that one observed was not a pleasing environment. I say this so that we can improve immensely,” Ramaphosa said. 

“If we do not move with speed to address the critical challenges identified, we risk undermining the progress we have made thus far.”

The president added that local officials will need to demonstrate over the coming months that he hadn’t made a mistake in choosing Johannesburg as the venue for the G-20 gathering. 

The largest city within Gauteng, Johannesburg, is emblematic of the province’s decline, with its infrastructure rapidly deteriorating. 

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.

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.

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.