<\/p>\n
South African business leaders warned that Johannesburg\u2019s deepening fiscal and governance crisis risks undermining the country\u2019s improving economic outlook, calling for urgent action to rebuild the nation\u2019s commercial capital.<\/p>\n
The city\u2019s decline has become a national emergency because it accounts for about 16% of gross domestic product and is central to domestic and foreign investment decisions, Business Leadership South Africa (BLSA) said in a statement on Thursday.<\/p>\n
Read:
CoJ finances \u2018a horror show\u2019 \u2013 Scopa member
Joburg Crisis Alliance demands urgent intervention over city budget
\u2018Absolute governance collapse\u2019: Joburg\u2019s electricity chaos exposes years of mismanagement<\/p>\n
Its deterioration risks weakening investor confidence just as South Africa\u2019s economic-recovery story gains traction, the lobby group said.<\/p>\n
\u201cThe situation is urgent and critical,\u201d BLSA said.<\/p>\n
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The warning comes after Finance Minister Enoch Godongwana in April threatened to cut crucial state funding to Johannesburg unless the city addresses $1.4 billion of wasteful spending and cancels plans to raise municipal wages by more than $600 million by next year.<\/p>\n
State power utility Eskom Holdings has also signaled it may suspend power supplies to the city over unpaid debt.<\/p>\n
The crisis in Johannesburg reflects years of accumulated failures across successive administrations, BLSA said.<\/p>\n
Capital expenditure has fallen to 6% of the city\u2019s budget, maintenance spending is about 0.5% of asset value, while rates and services charges have more than doubled in real terms over the past 15 years, even as property values have fallen and service quality has deteriorated.<\/p>\n
Read:
Joburg on the brink of collapse
Treasury threatens to cut City of Joburg funding
Joburg street lights switched off over electricity debt<\/p>\n
The private sector is prepared to work with the city and national government to help stabilise Johannesburg by providing expertise in governance, infrastructure delivery, financial management and anti-corruption measures.<\/p>\n
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That offer is contingent on there being \u201ca counterparty capable of governing scrupulously, delivering for the city, and being held to account\u201d, BLSA said.<\/p>\n
Such an approach would mirror business\u2019s collaboration with the national government under a partnership founded three years ago in which private-sector support helped the state tackle power shortages, logistics bottlenecks and crime. Such a model would help restore confidence in Johannesburg, the lobby group said.<\/p>\n
Read: Eskom\u2019s recovery is real, but R130bn in municipal debt puts it at risk<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Business #warns #Joburg #crisis #risks #South #African #recovery<\/p>\n","protected":false},"excerpt":{"rendered":"
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