Why Joburg is on edge: the financial crisis unfolding in the city

Key figures and shortfalls

According to The South African, the City of Joburg quietly took out a R3-billion short-term emergency loan to pay salaries and keep services running. The loan was, the report says, never approved by council and was revealed through audited financial statements.

The same source states the city’s creditor bill has ballooned to R25 billion. At the end of December 2025, the City of Joburg was reportedly spending just over R1 billion more per month than it was collecting. Its bank balance fell from R3.3 billion in November to R2.1 billion in December 2025, and only 26% of the capital expenditure budget had been spent by that date, The South African says.

Entity deficits and unpaid accounts

According to The South African, several municipal entities are deeply in deficit: City Power sits R19 billion in deficit; the Johannesburg Development Agency is R2 billion in the red; the Joburg Social Housing Company is R2 billion in the red; Metrobus is R695 million in deficit; and the Metropolitan Trading Company is R871 million in arrears.

The South African reports chronic revenue collection problems citywide: consumers reportedly owe R57 billion in total, commercial enterprises owe R11.5 billion, and state entities are behind by R2.4 billion.

Eskom arrears and electricity at risk

According to The South African, Eskom issued a formal notice to City Power warning it would interrupt or terminate bulk electricity supply to parts of Johannesburg unless debts are resolved. Eskom confirmed the city owes R5.2 billion in arrears and that a further R1.5 billion current account was due in June 2026, the report says.

The South African reports a short-term arrangement from 1 July 2026 under which all electricity revenue collected by the City of Joburg will be ring-fenced and channelled directly to Eskom. The city reportedly has until 8 July 2026 to clear its arrears or face disconnections.

Controversial wage deal and national intervention

According to The South African, a wage agreement signed in November 2025 is valued at R10.3 billion over two years. Finance Minister Enoch Godongwana, in a letter from April 2026, is reported to have directed the city to stop implementing the deal immediately and threatened to invoke section 216(2) of the Constitution to withhold Johannesburg’s R8-billion July 2026 equitable share instalment, the publication says.

What this means for the city

Taken together, the figures reported by The South African describe a municipality with large deficits, constrained cash flow and immediate pressure from a key service provider. The combination of emergency borrowing, high arrears to Eskom and the disputed wage deal has prompted national measures aimed at safeguarding electricity supply while questions about municipal finances remain unresolved.

Next steps

The South African’s reporting sets out deadlines and measures already communicated: the ring-fencing of electricity revenue from 1 July 2026 and the 8 July 2026 cutoff for arrears clearance. How the city addresses those deadlines and the wider fiscal shortfall will determine the near-term outlook for services and stability.