From world-class to collapse in 15 years
South Africa’s economic heart, Johannesburg, was once a proud host to the world but has now collapsed into an effectively bankrupt mess in desperate need of rescue.
According to Business Leadership South Africa chief executive, Busi Mavuso, the 2026 FIFA World Cup, kicking off in the United States this week, serves as a suitable reference point to highlight Joburg’s decline.
In 2010, South Africa hosted the World Cup, with Johannesburg holding the opening match between South Africa and Mexico.
“That 2010 World Cup showcased South Africa at its best. But the contrast between then and now reveals how far Johannesburg has since declined,” she said.
In 2010, the robots worked, streets were in great condition, and the city’s freeway improvement project had just been completed.
The metro was balancing its books: it had announced a fully funded budget and delivered an unqualified audit report.
The city had a good credit rating and was able to raise debt in the bond market. It spent over 16% of its budget on capital spending.
Fast forward to 2026, and the city’s collapse is laid bare for all to see.
“Even after accounting for inflation, the city’s budget announced two weeks ago is more than 60% higher than it was in 2010, yet property values are 21% lower,” Mavuso said.
“The services we receive have deteriorated dramatically, as has financial management. Its accounts last year were qualified by the Auditor General.”
The business leader added that the city’s capital expenditure for this year will be just 6% of the budget, while a massive backlog of infrastructure spending and maintenance accumulates.
“The Auditor General reported last week that Johannesburg had R2 billion of unauthorised expenditure because its budget was unfunded – it could not collect the revenue on which it based its budget,” she said.
“This year the city is counting on a 6.5% increase in revenue, largely from service charge increases, to fund an 8.1% increase in expenditure.”
Finance Minister Enoch Godongwana has already intervened over the city’s finances, flagging an unaffordable R10.3 billion salary deal, which he described as “illegally signed”.
He pointed out that the city is effectively bankrupt and has threatened to withhold an R8 billion equitable share grant.
“Suppliers remain unpaid – the city owes them far more than the cash it has on hand. Some are ceasing services because of non-payment,” Mavuso said.
Where the city was once an aspirational “world-class African city”, it is now in financial crisis, struggling to get the basics right.
National emergency
The city has fallen so far that business groups, including BLSA, have issued an urgent appeal to the political parties that facilitated its decline, as well as to the national government, to save the city.
In a statement issued to political parties, the city’s executive, President Cyril Ramaphosa and the national government, the business groups declared that Joburg’s collapse is a national emergency.
Mavuso said the failure of Johannesburg poses a systemic risk to the entire economy, pointing out that it 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,” she said.
The business group said that businesses are the city’s largest ratepayer group, with commercial properties representing 26.5% of property values and contributing 55.4% of property rates revenue.
“That gives us both a direct financial stake in the city’s recovery and a direct responsibility to act,” they said.
Mavuso said that businesses are making clear commitments to support the effort to save the city.
She said that they already provide funding support to local government reform efforts, and contribute to infrastructure repair, like potholes and robots.
However, they now want to “systemise, coordinate and scale these efforts,” Mavuso said.
But for this to happen, businesses need commitments from politicians to bring stable governance and accountability.
Notably, the city has had 10 mayors in 10 years, with political parties and politicians frequently prioritising narrow, self-serving interests over the needs of the city and its residents.
With an 11th administration due to enter office through the 2026 local government elections, businesses are seeking strong commitments from government and political parties to address the problems.
The priorities include:
- Capital infrastructure that is adequately funded and maintained;
- Irregular and wasteful expenditure that is eliminated;
- Service delivery measured against clear indicators and reported on transparently;
- Leadership held accountable for outcomes; and
- Consequence management applied consistently and without exception.
Whichever administration commits to these will see support from businesses to help save the city from its decline.
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