Business leaders warn of ‘national economic emergency’ in Johannesburg

Johannesburg – Business leaders have warned that Johannesburg’s deepening financial and governance crisis poses a threat to South Africa’s economic recovery, calling for urgent action to stabilise the country’s commercial hub and prevent further decline.

In a joint statement released on Thursday, leaders from Business Unity South Africa, Business Leadership South Africa and Business for South Africa said Johannesburg’s deterioration had become a “national economic emergency” that could undermine investor confidence and economic growth.

The business groups noted that Johannesburg contributes about 16% of South Africa’s gross domestic product and remains the country’s primary commercial centre.

“Johannesburg accounts for approximately 16% of South Africa’s GDP. It is the country’s commercial capital and the city where a disproportionate share of domestic and foreign investment decisions are made,” the statement said.

Mounting financial challenges

The organisations cited mounting financial challenges facing the city, including warnings from Finance Minister Enoch Godongwana that Johannesburg’s adjustment budget is unfunded and that its equitable share allocation could be withheld unless urgent corrective measures are implemented. They also highlighted concerns over unpaid debt to Eskom and the possibility of electricity supply disruptions.

According to the business groups, years of political instability and poor governance have contributed to the city’s decline. They pointed out that Johannesburg has had 10 mayors in the past decade, making long-term planning and implementation difficult.

“The situation is serious, and it is the result of accumulated failures, not of a single administration,” the statement said.

The organisations further alleged that corruption, criminality and maladministration had become entrenched within parts of the municipality, citing estimates by the Auditor-General that around R12 billion is lost annually through unauthorised and irregular expenditure.

Johannesburg’s recovery

Business leaders called on the current city administration to immediately stabilise municipal finances, improve service delivery and enforce consequence management for corruption and wasteful spending. They also urged political parties contesting next year’s local government elections to present detailed and costed plans for addressing Johannesburg’s fiscal and infrastructure challenges.

“Let us be clear: this is not about which political party governs Johannesburg, it is about how the City is governed,” the statement said.

The business sector pledged to support Johannesburg’s recovery through partnerships focused on infrastructure repairs, service delivery improvements and fiscal stabilisation. However, it said meaningful private-sector support would depend on having a capable and accountable government partner.

“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,” the organisations said.