South Africa’s government may soon need to make the politically fraught decision to take control of Johannesburg to avert the city’s financial collapse, according to a consultant appointed by two of the country’s leading business groups.
While such a move would be difficult for the ANC before crucial local elections in November, it may have little choice but to act, Lael Bethlehem, a partner at Genesis Analytics, said during the presentation of a study commissioned by Business Leadership South Africa (BLSA) and Business For South Africa.
“The City of Johannesburg is essentially bankrupt,” Bethlehem said Thursday. “We may have a situation where they may not be able to limp on until November and the government will have to implement” a takeover plan, she said.
Her presentation came a day before a Friday deadline set by Finance Minister Enoch Godongwana for the city to explain how it will address financial shortcomings or lose R8-billion in annual State funding, or about a 10th of its budget, a letter seen by Bloomberg showed. Mayor Dada Morero will respond next week, his spokesperson, Khathu Mulaudzi, said.
Run by an ANC-led alliance, Johannesburg has descended deeper into dysfunction in recent months and is expected to be among the fiercest battlegrounds in the Nov. 4 municipal vote. The DA, a partner of the ANC in the national coalition government, has nominated former party leader and Cape Town Mayor Helen Zille as its mayoral candidate.
