Joburg's budget is disconnected from reality, CDE warns
Johannesburg’s financial crisis is deepening, with the Centre for Development and Enterprise (CDE) warning that the country’s economic hub is caught in a dangerous cycle of rising costs, unpaid bills and deteriorating infrastructure.
In its latest report, Joburg’s Broken Budget, the CDE said gross unpaid bills owed to the city have increased from about R15 billion in 2014/15 to nearly R72 billion in 2024/25, meaning for every R6.00 billed for municipal services, roughly R1.00 was not paid.
“Johannesburg’s financial crisis is much more serious than an annual budget deficit,” said CDE Executive Director Ann Bernstein
Bernstein added that the City has become increasingly disconnected from the cash it actually collects, while continuing to spend on the assumption that billed revenue will eventually arrive.
CITY’S INFRASTRUCTURE SUFFERS THE CONSEQUENCES
According to the CDE report, real infrastructure investment has fallen by about 50% over the past decade, and by nearly 70% per resident.
At the same time, employee-related costs increased from around R8.6 billion to R20.7 billion between 2014/15 and 2024/25, now absorbing about 40% of cash collected from customers.
Bernstein describes the situation as a “classic municipal doom loop”.
Residents become less willing or able to pay as services deteriorate, forcing the City to increase tariffs on those who do pay.
This places further pressure on households and businesses, weakening revenue collection and leaving even less money for maintenance.
CRISIS AFFECTING CITY’S SUPPLIERS
Johannesburg owes more than R28 billion to suppliers, including major entities such as Rand Water.
Meanwhile, the City's Mayor Dada Morero said the city does have a turnaround strategy to resolve its financial problems.
Eskom also announced last Friday that the City settled its full R5,25 billion Eskom debt after threatening to shutdown the lights of the city.
CDE warned that relying on suppliers to carry the City's financial burden is unsustainable and could have consequences beyond the municipality.
Bernstein stressed that the City cannot simply be allowed to deteriorate further. She argues that any financial assistance from national or provincial government must come with strict conditions.
The CDE has called for improved revenue collection, tighter controls on employee and contractor costs, greater investment in infrastructure and stronger oversight of municipal finances and contracts.
With the November 2026 local government elections approaching, CDE has reiterated that Joburg faces a critical opportunity to change course.
The organisation argued that the city needs stable and competent leadership capable of tackling its financial and governance problems.
ALSO READ:
