The second report in CDE’s series, Johannesburg Matters: Fixing South Africa’s growth engine, warns that the non-payment of rates and utility bills, rising costs and collapsing infrastructure investment are pushing South Africa’s most important city into a dangerous financial spiral.

A central finding of Joburg’s Broken Budget is that Johannesburg’s budget is increasingly disconnected from reality. The City spends money it does not collect, imposing ever higher costs on a shrinking rates base and stagnant economy, while squeezing infrastructure investment and turning its suppliers into de facto lenders.

The problem has been years in the making. Gross unpaid bills owed to Johannesburg have risen from about R15-billion in 2014/15 to nearly R72-billion in 2024/25 – an increase of almost 17 per cent a year for more than a decade.

Employee-related costs rose by more than 9 per cent a year between 2014/15 and 2024/25, increasing from approximately R8.6-billion to R20.7-billion. These costs grew faster than the City’s revenue and considerably faster than the cash generated from customers.

As South Africa’s most important city, the country’s commercial heart and its largest local economy, Johannesburg’s success or failure will shape the prospects of millions of people far beyond its municipal boundaries. Yet the City is now caught in a chronic financial crisis that is deeper than a budget shortfall and more dangerous than an annual deficit. Johannesburg is living off a fiscal fiction.

Johannesburg’s financial crisis is one of the most concrete manifestations of its collapsing governance. It does not need another budget speech promising a turnaround. It needs a reckoning.

The report draws extensively on a specially commissioned report: Johannesburg’s Finances, by Antony Altbeker, independent researcher and public finance specialist.

Report by the Centre for Development and Enterprise