The failure of the City of Johannesburg poses a systemic risk to the entire economy, says business organisation Business Leadership South Africa CEO Busisiwe Mavuso.

The city accounts for 16% of the country's GDP and provides vital services across much of the economic base. Repeated failures in water supply, electricity and road maintenance are becoming an unacceptable risk for business.

The Auditor-General reported in May that Johannesburg had R2-billion of unauthorised expenditure because its budget was unfunded, meaning it could not collect the revenue it based its budget on, she points out.

Finance Minister Enoch Godongwana intervened over the city's unaffordable R10.3-billion salary deal, describing it as illegally signed and stating that the city is effectively bankrupt.

The City of Johannesburg's budget, announced in May, is more than 60% higher than it was in 2010, but property values are 21% lower.

The services citizens receive have deteriorated dramatically, as has financial management.

In 2010, the city passed a fully funded budget and received an unqualified audit report. It had a good credit rating and was able to raise debt in the bond market. It spent more than 16% of its budget on capital spending.

Capital expenditure for the current 2025/26 fiscal year will be 6% of budget, despite the massive backlog of infrastructure spending and maintenance accumulating, Mavuso says.

Business is already providing funding support to local government reform efforts and contributes to infrastructure repairs such as potholes and robots.

“We will work with the city and national government on interventions that can be deployed with speed and accountability. Success requires a public sector partner willing to enforce discipline and accept consequences when standards are not met.”

Johannesburg is the country's largest city and houses key institutions of the economy. It is in the national interest that the City's performance is turned around, Mavuso says.

“The 2010 World Cup showcased South Africa at its best and the contrast between then and now reveals how far Johannesburg has declined.

“Johannesburg needs business, government and citizens working together to fix this city.”