Johannesburg is increasingly spending on the assumption that money it bills residents and businesses will eventually arrive, even as its mountain of unpaid debt grows and much of it becomes unlikely to ever be collected.
Image: Mark Lewis | CDE
The Centre for Development and Enterprise says Johannesburg’s unpaid customer bills have climbed to nearly R72 billion, worsening pressure on service delivery, infrastructure maintenance and the City’s ability to pay suppliers.
Johannesburg’s unpaid customer bills have climbed to nearly R72 billion, according to the Centre for Development and Enterprise, which warns that weak revenue collection, rising costs and deteriorating services are reinforcing one another.
In its latest publication, Joburg’s Broken Budget, the CDE says the City is increasingly budgeting on the basis that money billed to residents and businesses will be collected, even though a growing share of that debt is unlikely to be recovered.
CDE says gross unpaid bills owed to the City increased from about R15 billion in 2014/15 to nearly R72 billion in 2024/25. Its analysis describes a cycle in which unreliable services undermine customers’ willingness or ability to pay, weakening revenue available for maintenance and investment.
“Johannesburg’s financial crisis is much more serious than an annual budget deficit,” said CDE executive director Ann Bernstein.
“The City has become dangerously disconnected from financial reality. It bills residents and businesses, records those bills as revenue and spends on the assumption that the money will arrive. Increasingly, it doesn’t.”
According to the CDE, the increase in unpaid customer debt during 2024/25 was equivalent to about R1 for every R6 billed by the City for rates and services.
The think tank describes this as a municipal “doom loop”: residents receive poor or unreliable services, payment levels weaken, and the City responds by raising tariffs for paying customers while postponing maintenance.
“Residents receive deteriorating services and become less willing or able to pay. The City responds by increasing rates and tariffs on those who do pay,” Bernstein said.
“More customers then struggle to pay or find ways to reduce their use of municipal services. Revenue weakens further, maintenance is postponed and services deteriorate again.”
Johannesburg’s audit outcome regressed from unqualified with findings in 2023/24 to a qualified audit in 2024/25, a measure of how far the deterioration has gone.
Image: Redrawn by ChatGPT
The Auditor General South Africa has also highlighted serious financial management challenges across the country’s metros. Its 2024/25 local government audit report found that metro audit outcomes continued to deteriorate and that no metro achieved a clean audit.
For Johannesburg specifically, the audit position requires careful distinction. The City’s separate financial statements regressed to a qualified audit opinion in 2024/25, while the consolidated City of Johannesburg group received an unqualified opinion.
Supplier arrears add to the strainCDE says Johannesburg’s unpaid debts to suppliers had climbed above R28 billion by June 2025, from R12 billion a decade earlier.
“This means Johannesburg is forcing its suppliers to finance its operations,” Bernstein said. “That is not a sustainable financing model.”
The organisation says employee related expenditure rose from R8.6 billion to R20.7 billion over the decade and now absorbs about 40% of the cash collected from customers.
At the same time, infrastructure investment has fallen sharply in real terms, according to the CDE. It says lower capital spending makes it harder for the City to maintain and upgrade ageing water, electricity and road infrastructure.
“A city cannot indefinitely increase the cost of poor and declining services for an economy that is barely growing,” Bernstein said.
Johannesburg’s leadership has acknowledged the scale of the City’s service delivery and governance challenges.
In the City’s 2026/27 Integrated Development Plan, Executive Mayor Dada Morero wrote that too many residents continued to experience the City “through failure rather than through possibility”.
Morero identified ageing infrastructure, governance weaknesses, service delivery interruptions and a “fraying social contract” as pressures requiring renewal.
“Our task in 2026/27 is therefore clear: to restore the basics, rebuild capability and reposition Johannesburg to lead once again,” Morero wrote.
The plan commits the City to reducing water outages, improving electricity reliability, maintaining roads and making municipal administration easier for residents and businesses to navigate.
CDE says electricity’s contribution to municipal revenue declined from 34% in 2014/15 to 28% in 2024/25, while the volume of electricity bought and sold also fell.
It estimates that electricity losses account for about 30% of the power bought by the City. The report argues that households and businesses able to install alternative electricity systems are reducing their dependence on municipal supply, further weakening the City’s revenue base.
The think tank says unpaid water bills have also grown rapidly over the past decade, making it more difficult to fund maintenance and upgrades to water infrastructure.
“The City needs revenue to maintain and upgrade water infrastructure,” Bernstein said.
“But the more unreliable the infrastructure becomes, the harder it is to bill accurately, collect consistently and persuade residents that payment is justified by the quality of the service they receive.”
CDE argues that Johannesburg must improve debt collection while protecting indigent households, contain employee and contractor costs, increase infrastructure investment and reduce supplier arrears.
It says outside financial support may ultimately be necessary, but warns that any assistance should be conditional on substantial financial and operational reforms.
“There is no solution without pain,” Bernstein said. “Johannesburg does not need another budget speech promising a turnaround. It needs a reckoning.”
IOL
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