Will City of Joburg collapse?

The City of Gold is rapidly losing its lustre as service delivery stutters and politicians squabble, threatening the collapse of the City of Joburg (COJ), says an activist coalition.

The Johannesburg Crisis Alliance (JCA), which consists of organisations such as the Ahmed Kathrada Foundation, the Organisation Undoing Tax Abuse (Outa), Action for Accountability, Defend Our Democracy and the Johannesburg Inner City Partnership, has called for an immediate intervention to end coalition chaos in the council.

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Joburg has had three mayors this year.

‘Deep crisis’

According to the JCA, the unstable coalitions in the city since 2016 have led to ineffective decision-making and institutional instability. The alliance said the COJ was in a deep crisis, unable to and incapable of extricating itself.

“With each passing day, residents, workers and businesses are confronted with potholed streets, leaking water pipes, overflowing sewers, malfunctioning traffic lights and lawlessness,” it said.

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“Tragically, the city is not safe. Lives are lost in fires and gas explosions tear apart streets. The city has seen a gradual decline for some time. It is facing massive disinvestment by business, which is aggravating the wicked challenges of unemployment, poverty and homelessness.

“The anger and frustration of residents will give way to violent protests unless something is done now.”

City ‘should be thriving’

Outa chief executive Wayne Duvenage said it was a real threat if the City of Joburg collapsed.

“A lot of head offices are based here and if we have an unfunded city, it’s going to get worse. If you’re not going to spend on maintenance, water problems become a bigger issue and more businesses will close their doors in South Africa as opposed to just relocating to another city, where things might be working,” he said.

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“It doesn’t send a good message to investors and certainly doesn’t send a good message to residents. You do not want a continuous downward decline of a city of this size. This is a massive part of the economy of this country.”

He continued: “At local government level, there’s politics at play, which have little regard for the city’s future and well-being…

“We see this where they’re passing the buck on water and other issues. We need something to change.”

The city has also experienced a financial decline. In the 2021-22 financial year, it had an unfunded budget of R3.8 billion. Unauthorised, irregular, fruitless and wasteful expenditure had accumulated to R21 billion and the city was only able to collect 75% of its budgeted revenue.

However, over the last decade, property rates income had risen from R4 billion to R13.5 billion and overall revenue had grown from R26 billion to R62.6 billion.

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“If managed well, the city should be thriving,” the alliance said.

“Why, then, is there a crisis? Capital expenditure has only risen from R4.6 billion to R6.7 billion over the decade, while employment costs for the current 40 000 employees has soared from R10.2 billion (2016) to R15.3 billion (2021).

“The mismatch is obvious and residents are bearing the cost.”

Joburg ‘an economic hub’

Chief economist at Efficient Group Dawie Roodt said Joburg was important from an economic hub point of view and, if it collapsed or conditions worsened, it would “without a doubt have a huge impact on the economy”.

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“Gauteng is by far the biggest economy of all the provinces and Johannesburg collapsing would have all sorts of implications,” he said.

“Gauteng is one of the two surplus provinces in the country – which means they contribute more to the national pot than they get out.”

Roodt said the local authorities’, state-owned enterprises and even the national government accounts were in deep trouble. People were being forced to make their own plans, “but making a plan costs a lot of money and it’s not always very efficient”.

“So it makes much more sense if you have a proper working authority that can combine and coordinate all these things so they can do it properly,” he said.

“Provisions of certain services are being fragmented because the private sector is trying to make things work by providing some of these services themselves.

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“The reason SA is in trouble is because of politics. Now … because of the emergency circumstances we are in … we are creating a sort of parallel government at all levels which is not very cost-effective,” he said.

“The price we’re paying due to the damage caused by the ANC cannot be calculated.”

– lungas@citizen.co.za