The City of Johannesburg is under intense scrutiny after the Auditor-General revealed that the municipality has written off R9.5 billion in revenue across its entities as irrecoverable, raising serious concerns over financial controls and governance. The audit also found that the city could not provide sufficient evidence to substantiate nearly R900 million it claims is owed by consumers.
Julia Fish, managing director of JoburgCAN, warned that the implications of these repeated debt write-offs extend far beyond balance sheets. “The implication of such a write-off is that the city is unable to pay for its biggest expense, which is bulk services—that’s buying electricity from Eskom and buying water from Rand Water,” Fish stated. She noted that Eskom has already issued a notice against the city for repeated non-payments and threatened to disconnect power, posing direct risks to service delivery for residents.
The timing of the findings coincides with local government elections, adding political complexity to the fiscal crisis. While the city maintains that R900 million is owed primarily by consumers, the Auditor-General—a credible independent institution—has repeatedly stated there is no evidence to support this claim. Fish described the city’s billing database as “a very muddy system,” pointing to widespread resident disputes over irregular charges, phantom disconnections, and unjustified penalty rates. Multiple class-action lawsuits over tariffs further complicate efforts to determine which debts are legitimate.
Although the city received an unqualified audit when all entities are combined, the core municipality itself received a qualified audit due to an inability to track activities, flawed financial reporting, and inadequate consequence management for irregular expenditure. Fish questioned whether the R900 million figure cited by the city could be inaccurate, noting it also fails to account for residents who legitimately qualify for relief under the equitable share grant—a national Treasury mechanism intended to cushion low-income households from steep tariff increases. Electricity prices, she noted, have risen by 400% over the last decade, yet the grant is not reaching the entities that need it, artificially inflating outstanding debt figures.
Even if the R900 million claim were accurate, Fish emphasized that it pales in comparison to the R9.5 billion already written off. While the city has launched initiatives to tackle non-revenue losses—such as fixing leaks and addressing illegal connections—Fish stressed that technical support from larger institutions like Rand Water, the Department of Water and Sanitation, and Eskom is essential. Compounding the challenge, the city’s own Integrated Development Plan projects that debt impairment could escalate to 45% over the next three years, suggesting much of the alleged debt is unlikely to be recovered. Additional complications arise from hijacked buildings and abandoned properties, where the city struggles to disconnect services promptly, allowing bills to accumulate unchecked.
Infrastructure maintenance remains critically underfunded. According to the Auditor-General, only 4% of the budget is allocated to maintenance, while Treasury recommends 8% of asset value. Nearly half of bulk water purchased from Rand Water is lost to non-revenue causes, including leaks and illegal connections, with similar losses affecting power distribution. The city faces a R220 billion infrastructure backlog that includes roads, reservoirs, and other essential assets. Although the latest budget, passed recently, increased the maintenance allocation to 8%, Fish argued that years of underinvestment mean the city should be aiming significantly higher. Turnaround strategies for Joburg Water and City Power remain unfunded, with operational budgets covering only half of what is required.
With only 15 days of cash coverage to meet obligations and contractors sometimes paid up to 300 days late—against a 30-day standard—Fish called for serious austerity measures. She highlighted the imbalance between the city’s R90 billion operations budget and its R8 billion capital budget for new infrastructure. Staff costs consume roughly 30% of operations spending, exacerbated by a fragmented structure: each of the city’s 13 entities maintains its own board, executive leadership, and financial managers, often remunerated well above municipal norms—in some cases, double the city manager’s salary.
Fish advocated for targeted cost-cutting, particularly on senior management wages, while supporting agreements that improve pay for lower-level workers. She also pointed to redundant, siloed IT systems and exaggerated licensing costs as areas for reform. Additionally, the city continues to rent office space despite owning properties through the Johannesburg Property Company that could accommodate its operations.
“As the Auditor-General’s report makes clear, the city must demonstrate that its interventions are actually beneficial,” Fish concluded. “Without transparent reporting, consequence management, and a commitment to fiscal discipline, the cycle of write-offs and service failure will continue.”
