Business has sounded the alarm on the financial and governance crisis bedevilling Johannesburg, urging President Cyril Ramaphosa and the government to do all in their power to facilitate urgent reforms that city-level leadership has failed to deliver.In a bluntly worded joint statement, Business Unity South Africa president Mxolisi Mgojo, Business Leadership South Africa chair Adrian Gore and Business for South Africa steering committee chair Martin Kingston warned that the visible decline of Johannesburg, which accounts for about 16% of South Africa’s GDP, “undermines the national growth story at precisely the moment a more positive narrative is gaining credibility”.“This is not a local political problem. It is a national economic emergency,” they said. “We are making this call now, ahead of local government elections, because the standards of governance the city requires cannot wait for another electoral cycle. Whoever forms the next administration will inherit an urgent, structural challenge.”Business is already playing its part by funding support to departments working on local government reform as well as contributing to infrastructure repair, including potholes, traffic signals and inner-city maintenance, they said.“These efforts are real but fragmented. We want to systematise, co-ordinate and scale them. We are prepared to deploy appropriate private sector resources into a programme of structured support for Johannesburg’s recovery, on the condition that we have a counterparty capable of governing scrupulously, delivering for the city, and being held to account.”‘Broken city’In an interview with Business Day TV this week, Helen Zille, the DA’s mayoral candidate for Johannesburg, said the city is so broken it would be difficult for any administration to turn it around without help from business.“We’re … going to have to do a lot of public-private partnerships, especially in the trading services, because it’s going to be impossible to fix things without them and their investment,” she said.Last month finance minister Enoch Godongwana met Johannesburg mayor Dada Morero to express his “serious concerns” about the city’s finances. That meeting came after a confidential letter in which the minister warned Morero to halt a controversial R10.3bn wage deal with municipal workers because the city was technically insolvent.The letter, leaked by Zille, accused Johannesburg of violating municipal finance laws and revealed that the city owed creditors R25.2bn while having only R3.9bn in cash.In Thursday’s statement, the business leaders noted that Johannesburg’s adjustment budget is unfunded, while its R8bn equitable share instalment for July — an unconditional transfer of nationally raised revenue to municipalities — is at risk because of the R10.3bn wage offer. In addition, Eskom might suspend the supply of electricity to the city over an unpaid debt of R5.3bn.“Johannesburg’s fiscal and governance crisis has been building for years. It is not a new or partisan issue, and the failures of the past decade have occurred under successive administrations and shifting coalition arrangements. What is new is the severity and urgency of the situation,” the business leaders said.Morero has previously said his administration inherited an already damaged Johannesburg with deep-seated problems. In his state of the city address last month, he said his administration was willing to find an amicable solution with Eskom over its debt.Morero also called on the Treasury, the public protector, and the Special Investigating Unit to look into the city’s finances and said that part of the solution for the city was guidance from the government on reforming and strengthening municipal trading entities.The business leaders said Johannesburg’s capital expenditure has collapsed to 6% of its budget, while maintenance spending stands at 0.5% of asset value. Despite rates and service charges soaring 124% in real terms over the past 15 years, service quality has deteriorated sharply.“The situation is not due to a lack of financial resources. Corruption, criminality and maladministration appear to be increasingly entrenched within elements of the city,” Mgojo, Gore and Kingston said in their statement.Non-partisan stanceThey stressed that their criticism was non-partisan.“We are addressing this statement to all political parties — those currently in government in the city, those in opposition and those who will contest the upcoming local government elections. We are addressing it to the president and to the national GNU [government of national unity],” they said.Parties contesting the elections scheduled for November 4 must provide specific, costed commitments on how to fix the city’s fiscal crisis, restore infrastructure and re-establish functional governance, they said, and urged the government to enforce consequence management if standards aren’t met.Rise Mzansi Johannesburg mayoral hopeful Lukhona Mnguni applauded the statement as an accurate assessment of the city’s problems.“The data presented by business is not in dispute and paints a terrifying picture of the dire state of Johannesburg. It is precisely because of this collapse that the sixth pillar of our campaign focuses entirely on anchoring a stable coalition,” Mnguni said.“The recovery of Johannesburg cannot happen in a vacuum; it must be anchored in a multisectoral, multifaceted strategy that brings business, civil society, and communities together.”