Huge reality check for South Africa
The collapse of South Africa’s economic capital, Johannesburg, is something the country and businesses simply cannot afford—and it’s not something the dysfunctional government that got it there can gloss over.
This is according to Business Leadership South Africa (BLSA) chief executive, Busi Mavuso, who raised deep concerns about the city’s massive debt to power utility Eskom, among other failures.
Eskom last week (19 May) threatened the city with power cuts and disruptions over the R5.2 billion in debt owed to the utility, with a further payment of R1.6 billion due in June 2026.
The city has been deteriorating before everyone’s eyes, with neglected, ill-maintained infrastructure, billing issues, a pervasive water crisis, and deep financial mismanagement.
Matters came to a head in the past month when things got so bad that the National Treasury had to step in, with a leaked letter from Finance Minister Enoch Godongwana revealing how far the city had fallen.
One of the critical issues raised by Godongwana was a R10.3 billion “political agreement” with unions for higher wages, which he said the city could simply not afford.
Worse still, the agreement was made with full knowledge that this was the case.
Despite these very apparent issues, city mayor Dada Morero delivered a State of the City Address last week of a “city on the rise”, not confronting the reality of the crisis he sits with.
This framing has rubbed businesses the wrong way.
“This is out of touch with the reality facing citizens who must cope with regular water interruptions, electricity failures, robots and street lights that don’t work, and a financial crisis that National Treasury has sounded alarm bells about,” Mavuso said.
“The mayor could not level with the people that city management is failing, or be honest about the root causes.”
The BLSA leader said that Joburg remains the economic heartland of South Africa, and that the city’s mismanagement is a “considerable constraint” on the entire economy.
“[Joburg] remains the home for many of our biggest companies, and it needs to become the world-class city it aspires to be, where businesses can grow into global champions,” she said.
“That can’t happen when our businesses must install backup water systems and generators, maintain private security, and navigate deteriorating roads.”
Mavuso said that all these failures amplify the costs businesses must carry and ultimately magnify the burden of doing business, undermining competitiveness across the country as a whole.
She added that for the city to change its fortunes, it requires political leadership willing to acknowledge the crisis and act decisively.
“The mayor’s denial won’t fix broken infrastructure or restore financial health. South Africa cannot afford for its economic heartland to continue failing,” she said.
“Out of touch”
The criticisms levelled at the Joburg mayor’s address aren’t limited to the business sector.
Civil action group, Outa, has also lambasted the mayor’s position as being “out of touch with the lived realities” of Joburg residents.
Throughout the speech, Johannesburg was repeatedly described as a “performing city” built on a “solid foundation” and the oft-used slogan of a “world-class African City”.
“Residents living through collapsing infrastructure, water outages, refuse failures, billing chaos, and deteriorating roads are unlikely to recognise the [optimistic] picture presented in this address.”
Outa said the claims run counter to worsening conditions, including water and electricity losses, financial instability, infrastructure decay, and ongoing service delivery failures.
The group also noted that many residents experience prolonged outages, poor communication, repeated delays, and days without a reliable water supply.
This reflects a broader concern around the growing gap between internal city reporting and the lived experience of communities across Johannesburg, it said.
Echoing business sentiment, the group said that Johannesburg remains critically important to South Africa’s economy and retains enormous potential.
However, restoring public confidence will require far more than political messaging and future promises.
“Residents judge government by whether the taps work, whether refuse is collected, whether roads are maintained, and whether basic services function consistently,” it said.
“Johannesburg’s recovery will not be achieved through speeches, slogans, or war rooms. It will require competent governance, sustained implementation, and leaders willing to confront the consequences of years of institutional decline.”
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