![\"Johannesburg](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/gettyimages-2246574401_20260320074644.jpeg\")
<\/p>\n <\/p>\n
\n Johannesburg is on the verge of financial collapse, owing billions to Eskom and state water utilities and facing looming power cuts due to unpaid bills.
\n <\/p>\n
Johannesburg is starting a new financial year with a multibillion-rand budget that\u2019s not fully funded, potentially deepening a crisis that\u2019s already left it unable to pay for power and fuel supplies.<\/p>\n
South Africa\u2019s biggest city is facing an unfunded budget gap of about R2.1 billion for the year starting July 1, according to a framework seen by Bloomberg News. The National Treasury attributed the shortfall to city revenue projections that appear overstated relative to audited results, according to the document.<\/p>\n
The metro forecasts an overall budget deficit of R7 billion for this fiscal year.<\/p>\n
READ | FRIDAY BRIEFING | Joburg doesn\u2019t need saving \u2013 it needs governing<\/a><\/p>\n The Treasury advised city authorities to narrow the gap by improving revenue collection and rationalising the 6-kilolitre free water allowance for non-indigent households. It also recommended resolving affordability concerns over the second phase of a personnel finance agreement, which requires a binding decision by the city council before the final budget can be approved, the framework shows.<\/p>\n The Treasury declined to comment, citing confidentiality, while the city didn\u2019t respond to multiple requests for comment. <\/p>\n Johannesburg is on the verge of financial collapse, owing billions to Eskom and state water utilities and facing looming power cuts due to unpaid bills.<\/p>\n READ | Eskom threatens to cut off scores of Joburg suburbs as City fails to pay electricity bill<\/a><\/p>\n Finance Minister Enoch Godongwana has also threatened to stop R8 billion in state funding because the city signed a R10.3 billion wage deal that he says is illegal and unaffordable.<\/p>\n READ | Godongwana plans to stop transfer of funds to Joburg after it adopted unfunded budget<\/a><\/p>\n 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 November 4 municipal vote.<\/p>\n The deterioration in its finances has alarmed business and the government because the city is South Africa\u2019s economic hub, contributing about 16% to the nation\u2019s gross domestic product. A financial collapse would reverberate across nation, impacting growth and tax revenue. <\/p>\n The city council discussed the turnaround framework on June 24, with several councilors stressing implementation is key to recovery and calling for metro authorities to provide regular, transparent updates. <\/p>\n The blueprint showed the city had just five days of cash to cover costs in March, far short of the Treasury\u2019s minimum 30-day benchmark for the new financial year. It comprises six pillars including measures to protect and grow the city\u2019s revenue base, strengthen financial governance and stabiliSe labor relations.<\/p>\n