{"id":826329,"date":"2025-06-03T14:59:12","date_gmt":"2025-06-03T12:59:12","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=826329"},"modified":"2025-06-03T14:59:17","modified_gmt":"2025-06-03T12:59:17","slug":"south-africas-capital-collapsing-in-front-of-everyones-eyes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/826329\/south-africas-capital-collapsing-in-front-of-everyones-eyes\/","title":{"rendered":"South Africa’s capital collapsing in front of everyone’s eyes"},"content":{"rendered":"\n

The City of Tshwane is struggling with infrastructure collapse and a decline in essential services. It is also slow to act on irregular and wasteful expenditure and financial misconduct.<\/p>\n\n\n\n

The problems with water delivery, the road network, and electricity infrastructure have been well documented over the last few years.<\/p>\n\n\n\n

Last month, Tshwane implemented load rotation in parts of the city to reduce pressure on its power grid. Illegal connections and cable theft caused the problems.<\/p>\n\n\n\n

“Pressure on the city’s transformers and substations during peak hours has necessitated the implementation of load rotation to avoid a total collapse of the electricity grid,\u201d it said.<\/p>\n\n\n\n

The Democratic Alliance (DA) in Tshwane highlighted that there was a rising occurrence of cable theft and vandalism of electricity infrastructure.<\/p>\n\n\n\n

\u201cCable theft and vandalism of electricity infrastructure have gotten worse, leaving the residents, businesses and even hospitals without electricity for days on end,\u201d it said.<\/p>\n\n\n\n

Alfred Makhafula, the DA Tshwane spokesperson on community safety, stated that over R500 million is lost annually due to cable theft and vandalism.<\/p>\n\n\n\n

Earlier this year, Rand Water issued a warning to Tshwane residents, urging them to reduce their water consumption or face a total system collapse.<\/p>\n\n\n\n

It said Tshwane was consistently exceeding its allocated water quota, exacerbating pressure on already strained resources.<\/p>\n\n\n\n

The DA said Tshwane\u2019s water systems are failing, with communities like Hammanskraal experiencing years of unreliable and contaminated supply.<\/p>\n\n\n\n

It added that municipal water infrastructure continues to deteriorate from a lack of maintenance.<\/p>\n\n\n\n

The city\u2019s road network is also under severe pressure. It struggles with thousands of potholes, and it can take years to fix sinkholes, which disrupt traffic flows.<\/p>\n\n\n\n

There are also serious crime concerns in the capital city, with high incidents of violence, robbery, and assault.<\/p>\n\n\n\n

Last year, Tshwane said that there was an increasing culture of lawlessness in South Africa and, by extension, Tshwane.<\/p>\n\n\n\n

\u201cPorous borders, poor economic growth, load-shedding and various other factors have led to an increase in crime and by-law infringements,\u201d it said.<\/p>\n\n\n\n

The Auditor General raises concerns about the Tshwane Metro<\/h2>\n\n\n\n
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Auditor General Tsakani Maluleke<\/figcaption><\/figure>\n\n\n\n

The Auditor General (AG) released a report that showed Tshwane was one of the worst-performing metros in South Africa.<\/p>\n\n\n\n

The city received a qualified audit for the 2023\/24 financial period, which means there were material misstatements found within its financial statements.<\/p>\n\n\n\n

This is troubling as it signals poor financial management and reporting within the Tshwane metro.<\/p>\n\n\n\n

The Auditor General reported that Tshwane\u2019s reported financial statement and performance reports were of poor quality.<\/p>\n\n\n\n

It also stated that, although the Auditor General informed the metro of misstatements, Tshwane was unable to make the required corrections.<\/p>\n\n\n\n

The AG noted that Tshwane was slow to investigate irregular expenditure, wasteful expenditure and financial misconduct.<\/p>\n\n\n\n

Unsurprisingly, the metro reported significant material irregularities in its financials over the past few years.<\/p>\n\n\n\n

In 2019 and 2020, Tshwane procured software licenses that were never used, which resulted in a financial loss of R99 million.<\/p>\n\n\n\n

In the 2021\/22 financial year, Tshwane awarded a R617 million contract to consultants, but did not implement adequate controls to review the consultants\u2019 work.<\/p>\n\n\n\n

This resulted in material misstatements and payments made to the consultants for work that was not done.<\/p>\n\n\n\n

Tshwane\u2019s poor credit rating<\/h2>\n\n\n\n
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Tshwane\u2019s ability to repay debt is also in a very poor condition, which affects lenders\u2019 willingness to offer financing to Tshwane.<\/p>\n\n\n\n

It also increases the borrowing cost at which the metro can obtain financing, which puts more strain on the taxpayer.<\/p>\n\n\n\n

This is reflected in Tshwane, together with Ekurhuleni, having the worst credit ratings of all South African metros. It obtained a Caa2 credit rating, which is very low.<\/p>\n\n\n\n

A Caa2 credit rating represents an institution with an extremely speculative credit rating and signals very high credit risk.<\/p>\n\n\n\n

Tshwane also received a negative credit rating outlook, which means that Tshwane\u2019s credit rating has a higher probability of a credit downgrade.<\/p>\n\n\n\n

If Tshwane\u2019s credit rating were downgraded further, it would reach a Caa3 credit rating, which signals extremely high credit risk with a high default probability.<\/p>\n\n\n\n

The Auditor General mentioned that rating agencies have downgraded Tshwane due to its declining revenue collection.<\/p>\n\n\n\n

This alarmed rating agencies as it signals a lower ability to repay debt obligations and a higher risk to creditors.<\/p>\n\n\n\n

Tshwane had significant budget shortfalls due to poor revenue and debt collection. The metro wrote off 72% of debts owed to Tshwane, which led to a further inability to cover its own debt.<\/p>\n\n\n\n

Over the past 3 years, Tshwane had the largest amount of fruitless and wasteful expenditure of all the metros in South Africa, amounting to R3 billion.<\/p>\n\n\n\n

In light of these serious problems at Tshwane, the Auditor General stated that the metro is still struggling with \u201cthe basics\u201d.<\/p>\n\n\n\n

Tshwane has, for the past four years, cast significant doubt on its ability to continue operating as a going concern.<\/p>\n\n\n\n

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Fruitless and wasteful expenditure<\/h2>\n\n\n\n
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City of Tshwane’s collapse in photos<\/h2>\n\n\n\n
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The City of Tshwane is struggling with infrastructure collapse and a decline in essential services. It is also slow to act on irregular expenditure, wasteful expenditure and financial misconduct.<\/p>\n","protected":false},"author":10,"featured_media":826345,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[22710,6490,22560,14467],"class_list":["post-826329","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-auditor-general-ag-2","tag-city-of-tshwane","tag-democratic-alliance-da","tag-rand-water"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826329","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=826329"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826329\/revisions"}],"predecessor-version":[{"id":826352,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826329\/revisions\/826352"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/826345"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=826329"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=826329"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=826329"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}