The latest Ipsos polling shows that the ANC is leading in Joburg (31% v 27% for the DA) in the local government elections. But if nothing changes in the City, business might well still leave for greener pastures or bunker down in gated enclaves.
With less than two months to go until Joburgers vote in the 2026 local government elections, businesses of all shapes and sizes are contemplating their options. While there are hopes the current coalition will be removed and the City will change direction, recently published polling shows this may not happen. And if Joburg continues to decline, capital may well start to flow out of the city rapidly.
For the last few months the Democratic Alliance’s (DA) narrative within Joburg suburbs has been that its polling shows it is a city administration in waiting.
Other, presumably more independent, polling by the Social Research Foundation and Common Sense claims the DA is sitting on 42% while the ANC has dropped to 18%.
But, a truly independent poll by Ipsos (easily the group most experienced in polling in SA) now says that in Joburg the African National Congress (ANC) is still sitting at 31% while the DA is only on 27%.
This is much closer to the 2024 Gauteng election results, where the ANC won 32% of the votes cast in Joburg, and the DA won 24%.
And it’s a stark reminder to businesses that the narrative they may have imbibed could be wrong.
Many boardrooms might well have already grappled with the question of whether to move the company headquarters out of the city (perhaps to Stellenbosch or Cape Town itself…). Others might well have decided to wait until after the elections to see if the situation will change.
If it is clear after the poll that nothing will change, many may then automatically go ahead and downgrade their Joburg operations.
While those decisions may be fairly damaging, what may be worse over the next decade is decisions that will not win headlines.
Many other companies may well be holding fire on decisions about investing further in the city. And if there is no visible change in direction, the lack of investment that follows may well have a much more damaging impact over time.
Also, those companies that are committed to Joburg and cannot leave Gauteng will try to further insulate themselves from municipal failure.
This means more office parks and developments such as Waterfall City near Midrand, where firms move into enclaves.
The same will be true for residents with means. Those who can will continue to either erect barriers and walls and traffic stops around their suburbs, or move into complexes that supply their own services.
This will intensify inequality in the city and further divide us. All of us will spend less time with people from communities different from ours with all sorts of important consequences.
Also, once firms start to go down this road, it would be harder in the future to convince them that things will change. If there is no change at this election, in five years time they are unlikely to believe that change will come then.
At the same time, there are now other options for companies.
In Tshwane, that same Ipsos poll suggests the DA is in a stronger position than the ANC there. Which means it is possible Tshwane starts to turn around while Johannesburg continues its decline (although it must be said that the situation there did not appear to improve during the DA’s previous stint in power, interrupted as it was by the ANC’s illegal attempt to take it into administration through the province).
For firms in Midrand, it may be tempting to point out that any further investment in Gauteng should be just 20km up the road in Centurion rather than continue to lose money in Joburg.
One of the most important but under-appreciated facts of our economy in the last decade has been how the Western Cape economy has started to grow much more quickly than the rest of the country (Unemployment there is now 19.5% compared to Gauteng’s 34.5%).
While the argument around why is long and messy (to over-simplify: it must be a combination of historical development, the fact Western Cape had no homelands and the current incredibly business-friendly government there), the numbers show it is easier to run a business there.
It’s true there is probably little difference between living in the poorer parts of Khayelitsha and the poorer parts of Diepsloot. But for businesses, water and electricity supplies must be more reliable in Cape Town than in Joburg.
The fact this difference would only grow unless both cities change direction would be a crucial factor in investment decisions going forward.
There is simply no point in investing in a place where the basics no longer work, no matter how much capital has already been invested in that place over time.
It may be tempting to blame business for making what could be seen as a political decision to leave the city. Critics of business would say firms simply wanted the DA to win because they are run by middle-class people.
However capital would simply be following a rational course.
Just as money flowed out of the UK when then-prime minister Liz Truss approved of a budget seen as too right-wing, so money will flow out of Joburg if the current corruption and incompetence is given a democratic licence to continue.
And, it’s worth remembering that business leaders are not making decisions about their own money, they’re usually making decisions involving other people’s money and thus have an obligation to be responsible.
Also, it is the current administration’s fault that Joburg is in this position.
It is irrational to invest more money in a city where the council votes to appoint a head of public Safety previously suspended by the province of Gauteng because of financial irregularities.
As Daily Maverick’s Ferial Haffajee explained last week, the only conclusion one can draw from the ANC’s recent behaviour, whether it be its inability to confirm a mayoral candidate or to enable corruption, is that it’s given up on the city.
Why should companies be any different?
It is, for now, impossible to calculate how much capital Joburg would lose, either through companies leaving the city or just deciding to invest elsewhere should there be no change in direction.
But there can be no doubt that unless the city changes direction soon, the cost would be truly incalculable. DM
