South Africa’s richest city has a R200 billion crisis 

The City of Johannesburg needs around R200 billion to fix its deteriorating infrastructure, including a major overhaul of its water supply systems. 

Joburg Mayor Dada Morero recently told the SABC that the city is also on a campaign to raise an additional R100 billion in the next five years. 

He said the city plans to begin investing in and maintaining its existing infrastructure and then expand it to accommodate a growing population. 

This points to something unique about Johannesburg’s ongoing crises – they are all largely self-inflicted, with municipal mismanagement exaggerating national issues. 

A lack of maintenance of existing infrastructure accounts for the deterioration of the city’s roads and the non-operation of many traffic lights along key routes. 

Johannesburg’s water crisis is most emblematic of the self-inflicted nature of the city’s collapse, with the city failing to adequately meet rising demand and maintain infrastructure. 

Municipal officials, representatives from Rand Water, and Water and Sanitation 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.

Johannesburg needs around R26 billion to halt the collapse of its water infrastructure alone, and it needs billions more to upgrade the system to cope with its growing population. 

This R26 billion simply covers Johannesburg catching up in infrastructure repair and maintenance – not expanding to accommodate a growing population. 

Joburg Water, owned by the municipality, currently spends around R1.2 billion on its water infrastructure. This will have to be ramped up significantly.

The city estimates that it needs R221 billion to address its maintenance backlog and deliver overdue infrastructure upgrades. 

“We are exploring ways to raise funds off the balance sheet by seeking private investors or other market solutions to help bridge the gap,” Morero said.

“Our projections indicate that between R10 billion and R15 billion is needed just to stabilise or maintain the water infrastructure.”

Problems run deep

The main question surrounding this plan is where the money will come from, as the city and national government’s finances are severely constrained. 

South Africa’s richest province, Gauteng, is also unable to offer much help as it is facing a liquidity crisis, according to Finance MEC Lebogang Maile. 

Maile issued this warning when he presented the province’s Medium-Term Expenditure Framework (MTEF) Budget in March. 

Gauteng is expected to spend R527.2 billion over the next three years to deliver on existing services and revive the provincial economy. 

However, despite this huge budget, Maile warned that the province is under severe financial pressure and proposed implementing compulsory baselined reductions across all departments. 

“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 to 2029 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 its woes, the province is also 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.

And so, it is unclear how the City of Johannesburg plans to fund its R200 billion plan to fix its deteriorating infrastructure. 

Bloomberg previously reported that the city is in talks with lenders such as Standard Bank and even the World Bank to finance its infrastructure maintenance and upgrades.

Johannesburg has also been plagued by leadership problems. 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.