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This week’s tabling of the City of Johannesburg budget reveals a metro that is heavy on staff and salaries, light on infrastructure development, big on debt and short on innovative ideas on how to cut costs.Johannesburg’s R97.1bn budget for financial 2027 was announced this week by finance MMC Loyiso Masuku.The city has in part blamed falling revenue for its service delivery failures. (Nolo Moi) But analysts say the city is in a financial death spiral and that residents are having to absorb the brunt of the financial crisis through huge tariff increases. The Sunday Times asked three experts what the city should be doing to cut costs.Julia Fish of WaterCAN (LinkedIn) Julia Fish, executive director of civil society’s JoburgCAN and member of the Presidential Johannesburg Working Group for finance and governance:1. The heads of all but one of the city’s 13 entities are paid above the upper limit set for senior managers by national government gazettes. The highest-paid is the Joburg Property Co (JPC) CEO [Musah Makhunga], at R5.4m a year, a sharp 60% increase this year alone. Joburg simply cannot afford these salaries, bonuses and perks. The draft 2026/2027 budget also shows a sharp increase in senior managers over two years, from 330 to 1,025, and board members from 70 to 385. 2. We need to invest in cheaper bulk purchase infrastructure, such as battery storage, in independent power producers and in non-revenue reduction mechanisms to bring down our reliance on Rand Water and Eskom. The current monthly bulk purchase from Eskom is about R1.5bn. Public Affairs Research Institute research has shown that an effective feed-in tariff, where City Power buys excess household solar from residential customers, could save the municipality R2bn a year. More than 40% of the bulk water bought from Rand Water is lost to leaks and illegal connections. If this is reduced to even 20%, that saves us more than R200m a month.3. Reduce systems costs such as SAP licensing fees and other platforms that are inflated by middleman suppliers or contracts. The city has spent more than R1bn on SAP services in the past decade. 4. Though loans are a legitimate financial mix mechanism, repayments are ballooning. We need to redirect funds to pay off loans sooner and reduce additional loans. Instead, we need funding from the open market for capital expenditure through entity bonds.5. Establish a functional property portfolio by either selling or leasing JPC assets to raise capital. We need to invest in city-owned property, like the Metro Centre, instead of paying rent for all the city’s departments. In 2023 the JPC estimated that leases for departmental offices around the city would cost R120m a year based on the 70,000m² needed. I do not expect these steps to be taken, because those benefiting from the present disorder would lose out personally— Prof Alex van den HeeverProfessor Daniel Meyer from the University of Johannesburg College of Business and Economics (University of Johannesburg) Prof Daniel Meyer from the University of Johannesburg College of Business & Economics:1. Capital backlogs and budget allocation: there is only a 9% capital infrastructure allocation against a R220bn infrastructure backlog. At least 20%-30% must be allocated for infrastructure investment and upgrades. Make sure to ringfence capital investment. International best practice for infrastructure-intensive cities requires a minimum 15% capital allocation. At current rates the infrastructure gap will grow faster than the city can service it. 2. The R10.3bn South African Municipal Workers Union (Samwu) wage deal still has no defined funding source. Tie the Samwu wage deal to measurable productivity and collection rate improvements. The political justification for the R10.3bn agreement is that a motivated workforce will improve service delivery and revenue collection. The wage payments should be structured as performance-linked tranches, released for example only when City Power’s collection rate hits a target, when Johannesburg Water reduces its 40% non-revenue water loss by a defined percentage, and when Pikitup’s waste collection coverage improves. Pay for performance, not for political peace.3. Revenue projections are repeatedly overstated and historically unreliable. By January 31, overspending had already reached nearly R4bn. The 2026/2027 budget projects a 9.3% revenue increase, yet the city has missed revenue targets for multiple consecutive years. Base revenue projections on actual historical collection rates, not aspirational targets.4. Above-inflation tariff increases are being imposed on residents while they receive deteriorating services. Asking residents to pay 9% more for electricity and 12.5% more for water while services continue to deteriorate fundamentally breaks the social contract of local government. 5. Implement zero-based budgeting for the 13 municipal entities and rationalise the structure. The city operates through 13 municipal entities and 21 internal departments, each with its own executives, boards, overheads and accountability gaps, with huge salary bills. Zero-based budgeting, combined with structural consolidation of entities with overlapping mandates, would free hundreds of millions for direct service delivery annually. Professor Alex van den Heever, Wits School of Governance (Wits School of Governance) Prof Alex van den Heever, Wits School of Governance1. The city’s budget confirms that the city is no longer dealing with a normal fiscal-management problem. It is in a governance-driven financial death spiral. The core problem is not only weak revenue collection or expenditure pressure. It is corruption-related revenue loss, uncontrolled personnel expansion and structurally compromised procurement. These are crowding out the spending needed to maintain water, electricity, roads and other basic infrastructure.2. The budget numbers are not credible. A revenue budget that assumes collections which the city is not achieving is not a budget. It is a fiction. If accounting officers and CFOs knowingly table or support an unfunded or materially unrealistic budget, that raises serious Municipal Finance Management Act accountability issues and should trigger disciplinary processes and, where appropriate, criminal investigation.3. The municipal entities have become part of the problem. City Power, Joburg Water, Pikitup and the JPC should not operate as semi-detached political structures with boards and senior executives appointed through political networks. That creates conflicts of interest that allow procurement, revenue systems and appointments to be captured. The result is inflated executive pay, weak consequence management and entrenched networks of extraction.4. The corrective measures are structural. The entities should be reincorporated into the municipality, irrelevant boards removed, unfit executives replaced and revenue collection consolidated in a single municipal structure. The city should freeze new hiring, reduce senior executive layers substantially, implement procurement transparency by default, restore the Metro Centre and return staff to proper office-based management. Tainted political office-bearers should be removed from oversight roles, and a credible city manager appointed.5. I do not expect these steps to be taken, because those benefiting from the present disorder would lose out personally.
