South Africa’s richest city is collapsing

 ·11 Oct 2024

Johannesburg, South Africa’s economic hub and largest city, has been on a downward spiral regarding basic service delivery, creating a stark contrast between its status as the wealthiest city in the country and the deteriorating conditions residents face.

As South Africa’s financial epicentre, Johannesburg boasts the headquarters of numerous multinational corporations, critical financial institutions, and the largest stock exchange in Africa, the Johannesburg Stock Exchange (JSE).

Despite its affluence and being home to an elite segment of society, the city has been grappling with collapsing infrastructure and inadequate service delivery, which reflect a governance crisis and raise questions about the city’s sustainability.

The city’s electricity woes are particularly emblematic of its struggles. Johannesburg’s electricity distributor, City Power, has been unable to provide consistent and reliable service.

In early 2024, residents faced frequent blackouts and power cuts, not just due to national load-shedding implemented by Eskom but also due to the city’s own ageing and poorly maintained infrastructure.

According to official statements from City Power, the electricity grid is under severe pressure due to infrastructure that is over 50 years old, significantly beyond its intended lifespan.

City Power noted that it is facing a substantial maintenance backlog, and a significant portion of the city’s budget has been reallocated to emergency repairs.

Despite efforts to address these challenges, City Power’s operational capacity remains severely constrained.

The grid suffers from frequent breakdowns, particularly during periods of high demand, leaving many residents in the dark for extended periods.

The entity has also been financially burdened, struggling to recover debts from residents and businesses alike, many of whom cannot afford rising tariffs.

The situation with water infrastructure is similarly dire. Johannesburg Water, responsible for the supply of potable water, has faced increasing difficulties with maintaining and upgrading the city’s water systems.

In 2024, numerous suburbs experienced chronic water shortages, exacerbated by burst pipes, water leaks, and an outdated pipe network that has been neglected for decades.

Official reports from Johannesburg Water indicate that nearly 40% of the city’s water is lost through leaks and illegal connections before reaching consumers.

This has triggered widespread frustration among residents who often go days or weeks without water, a shocking reality for a city that is supposed to be the wealthiest in the country.

Alongside electricity and water, the neglect of other essential services like road maintenance has further deteriorated the quality of life in Johannesburg.

The city’s roads, particularly in suburban areas, are riddled with potholes, some so large and numerous that they cause traffic accidents and damage vehicles.

In the past, the Johannesburg Roads Agency has admitted to being severely underfunded, with budget allocations insufficient to meet the growing demand for road repairs.

It has been noted that long-term needs could require as much as R81.5 billion over the next decade.

The broader financial challenges of Gauteng province, in which Johannesburg is located, compound these local crises.

Lebogang Maile, the MEC for Finance and Economic Development, warned that the province was in a precarious financial position.

He stated that Gauteng was facing a budget cut of R15 billion, which would drastically affect its ability to provide services.

Maile went so far as to suggest that Gauteng could face bankruptcy by as early as June 2025 if the government did not take immediate action to rein in spending.

“Our fiscal outlook is very grim,” Maile said in a provincial address. “If we do not cut back and reprioritise our budget, we will not be able to sustain our operations beyond next year.”

Maile’s comments have sparked widespread concern about the province’s financial health, given that Gauteng is responsible for a substantial portion of South Africa’s GDP.

Johannesburg, Gauteng’s economic heart, relies heavily on the provincial budget to maintain its infrastructure and services.

However, with billions of rands in budget cuts, essential services like electricity, water, and roads are likely to suffer further declines.

Despite Johannesburg’s status as South Africa’s richest city, home to luxury suburbs, large business districts, and wealthy individuals, the reality on the ground paints a very different picture for its residents.

If these issues are not addressed, the city could face continued degradation, jeopardising its status as South Africa’s economic powerhouse.

With mounting debt, collapsing infrastructure, and a looming financial crisis, Johannesburg’s future remains on shaky ground.


Read: State of disaster declared in one South African province

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