Centre for Development and Enterprise<\/a>\u00a0said in a report published Tuesday. <\/p>\n\n\n\nThat, the research organisation said, is the root cause of collapsing infrastructure.\u00a0<\/p>\n\n\n\n
\u201cThe city has become dangerously disconnected from financial reality,\u201d said Ann Bernstein, the CDE\u2019s executive director. \u201cIt bills residents and businesses, records those bills as revenue and spends on the assumption that the money will arrive. Increasingly, it doesn\u2019t.\u201d<\/p>\n\n\n\n
The CDE described the situation as \u201ca structural governance failure that constitutes a fundamental obstacle to delivering municipal services.\u201d <\/p>\n\n\n\n
The report is the latest indictment on the economic management of the city, which accounts for 16% of South Africa\u2019s economy, houses 70% of its corporate headquarters and, despite its challenges, remains Africa\u2019s most-important financial centre. <\/p>\n\n\n\n
Late or non-payment of bills to utilities such as power provider Eskom and regional water supplier Rand Water are threatening the state utilities\u2019 viability, according to the CDE. <\/p>\n\n\n\n
\u201cJohannesburg is not a small town whose failure can be contained,\u201d it said. \u201cJohannesburg\u2019s financial crisis is not just a local governance issue. It is a national economic risk.\u201d<\/p>\n\n\n\n
The CDE study shows the city\u2019s economy is growing at a far slower pace than its expenditure. <\/p>\n\n\n\n
In the decade through 2025, the city\u2019s working-age population grew by more than 767,000 to 4.2 million, while it only added 30,000 jobs. Just 1.98 million of its residents are employed.<\/p>\n\n\n\n
Employee-related costs rose more than 9% a year to R20.7 billion over the same period, while annual expenditure on infrastructure fell to as low as R6 billion, from R10.5 billion.<\/p>\n\n\n\n
\u201cThis is what municipal decline looks like in financial form,\u201d the CDE said. \u201cThe city looks after its own employees first, so salaries are paid. Beyond that it struggles to do what it is supposed to.\u201d<\/p>\n\n\n\n
Johannesburg has already been censured by the National Treasury, which withdrew state funding temporarily earlier this year because of the state of its finances. <\/p>\n\n\n\n
In a 24 August radio interview, Johannesburg Mayor Dada Morero said its finances were improving. The city last week paid Eskom R5.26 billion in overdue power bills.<\/p>\n\n\n\n
The municipality is run by a coalition led by Morero\u2019s African National Congress. With local government elections scheduled for November, opinion polls show the ANC trailing its biggest rival, the Democratic Alliance. <\/p>\n","protected":false},"excerpt":{"rendered":"
Johannesburg is stuck in a debt doom loop as its failure to collect debts continues, leading to tariff increases.<\/p>\n","protected":false},"author":59,"featured_media":865574,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2092176416368472396","_sma_facebook_post_id":"191437357620492_2186085795545153","_sma_instagram_post_id":"","_sma_x_attempts":2,"footnotes":""},"categories":[23],"tags":[20715,14265,20394,1164],"class_list":["post-871939","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-ann-bernstein","tag-centre-for-development-and-enterprise","tag-dada-morero","tag-eskom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/871939","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\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=871939"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/871939\/revisions"}],"predecessor-version":[{"id":871950,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/871939\/revisions\/871950"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/865574"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=871939"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=871939"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=871939"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}