Johannesburg: Rates increases across the board - CRA Update

Added: 2026-05-28

[00:00:00][bell] [music] >> Yesterday, the 27th of May, 2026, the city of Johannesburg tabled its largest budget in history at 97.1 billion rand. Our residents are going to feel every cent of this budget. Water is up 12.5% sanitation 11% electricity 8.63% and refuse removal up 6.2% property rates will go up 3.6%.

[00:00:39]So, across the board for a middle-income household, the combined increase will comfortably outpace inflation at a time when real incomes are stagnant, food prices are elevated, and fuel costs have been pushed higher by the Strait of Hormuz disruption. Now, the question isn't whether the city of Joburg needs more money. The question is whether it deserves more of your money.

[00:00:59]So, here's the fundamental problem. The city has simultaneously revised its own revenue collection rate downward from 88.6% to 86%. It loses 44.7% of the water it produces before it reaches a paying customer. It loses 27% of the electricity it distributes.

[00:01:18]Its infrastructure backlog across water, electricity, and roads exceeds 220 billion rand.

[00:01:25]And its cash cost coverage ratio sits at 9.8 days where the benchmark is 30 to 90 days.

[00:01:32]The city's own budget acknowledges that if City Power reduced electricity losses from 27% to 15%, it would generate 3.5 billion rand in additional revenue without touching the tariff.

[00:01:45]That single operational improvement would be worth more than most of these increases combined.

[00:01:50]So, residents are being asked to pay more for services a city that cannot collect what it builds, cannot contain what it distributes, and cannot fund its own infrastructure repairs.

[00:02:00]Johannesburg [snorts] is not alone in this regard. Last week, Thembezwa Zibi, the chairperson of Parliament's Standing Committee on Public Accounts, told News24 that most of the African municipalities are, in his words, {quote} politically, administratively, and financially unviable, {end quote}.

[00:02:17]He has been hauling Mangaung, Buffalo City, Tshwane, and Ditsobotla before SCOPA.

[00:02:24]When he was asked about the prospects for fixing local government, his response was one word, "Nothing."

[00:02:30]He also warned that at least one metro may soon be placed under administration.

[00:02:35]Coming back to the city of Joburg, the city's proposed solution is the Metro Trading Services Reform Program, which would mean ring-fencing trading service revenues, phasing out cross-subsidization, and unlocking up to 27.7 billion rand in national treasury performance-linked grants over the medium term. On paper, it is a credible framework. The problem is that the budget speech itself concedes that Johannesburg's failure is not a failure of plans, it's a failure to convert plans into outcomes. It doesn't touch on politics, it doesn't touch on ideology.

[00:03:09]That admission is buried in the same document that asked you to pay 12.5% more for water.

[00:03:15]>> [snorts] >> One final risk that the budget doesn't adequately account for is that rising tariffs accelerate non-payment among households already under financial stress.

[00:03:24]The city is raising tariffs to protect its revenue base, but if those increases push more households into arrears, the revenue base that they're meant to protect erodes further.

[00:03:34]It's not hypothetical, it's simply a pattern that that the city of Joburg is already caught in.

[00:03:39]With local government elections scheduled for the 4th of November this year, this budget is as much a political document as a fiscal one.

[00:03:47]For investors and businesses operating in Johannesburg, the structural risks, including revenue underperformance, infrastructure decay, and institutional fragility predate this administration and will outlast it.

[00:04:00]The Centre for Risk Analysis will continue to track how these dynamics play out. If you found this useful, subscribe, share it with a colleague, and follow the CRA for ongoing political and economic intelligence on South Africa.

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