As municipal systems deteriorate, access to basic services in Johannesburg increasingly depends on private resources rather than public provision. Households and businesses with sufficient means mitigate the risk of failure by paying for private security, solar power, boreholes and water storage systems — on top of the rates and taxes meant to buy precisely those things. Small firms, households and individuals without such resources remain fully exposed to the city’s dismal failure.

Meanwhile, the cost of municipal services continues to rise as the city struggles to bring in the revenue required to keep itself afloat financially. Rising tariffs amid increasing financial pressure and declining service quality make many residents and businesses ask why they are paying more while receiving less. This creates a growing dynamic of frustration with local government and weakens confidence in Johannesburg as a place to live and invest among the very people needed to drive economic growth.

This matters far beyond the firms carrying the cost. Johannesburg is the country’s largest commercial, retail and financial centre. It is a corporate hub, hosting 70% of South African company head offices. It remains South Africa’s financial centre, anchoring what Harvard’s Ricardo Hausmann has described as the developing world’s deepest financial market. It houses the continent’s largest stock exchange and the largest fresh produce market.

Johannesburg is the single most important metro nationally in terms of tax generation, producing 21.8% of the personal income tax in South Africa and about 11% of the country’s jobs are in the city, with 1.915-million people employed there.

About 5.9-million people lived in the city in 2025 (though that is probably an undercount). They are relatively young, with many families who have deep and long-established roots in the city. People from different parts of South and Southern Africa and beyond continue to migrate to the city looking for new opportunities.

Well-run cities are places where it is easy to do business. Johannesburg is no longer one of them. Failing water and electricity services raise the cost of doing business, eating into firms’ revenues and compelling some to close or relocate, which results in fewer jobs and a shrinking rates base.

High levels of crime prevent people from running viable businesses, make night markets, night schools and 24-hour use of factories or workspaces almost impossible, and push those with skills and capital out of the city. In the inner city, criminal syndicates now operate buildings with relative impunity, damaging infrastructure and driving businesses away.

The planning system has in effect collapsed. After a 2023 fire rendered the Metro Centre unsafe, officials abandoned the building rather than repair it, leaving the paper-based records and plans behind, partly sealed off and largely unattended. These plans are the legal and planning history of the city. Property owners and developers have reportedly been forced to redraw plans at additional costs of R20,000-R50,000 simply to proceed with approvals and financing.

The damage is not confined to large firms. Collapsing infrastructure creates a hostile, uncertain environment for housing developers, especially the microdevelopers expanding affordable rental accommodation in Johannesburg’s suburbs. In declining neighbourhoods builders cut corners and cannot access capital and bridging loans at reasonable rates. Affordable accommodation declines in quantity and quality, property rights are eroded and informality and decline spread.

Municipal dysfunction ensures that property development is in decline. Over the past 10 years the city recorded a cumulative house price decrease of 2%, compared with an increase of about 60% in Cape Town. This sustained underperformance weakens household wealth, reduces investment incentives and erodes the property rates base on which the city depends.

Johannesburg is in severe financial distress: finance minister Enoch Godongwana has warned that the city owes creditors R25.2bn but holds only R3.9bn in cash and cash equivalents. Johannesburg Water has identified an infrastructure renewal backlog of R26.6bn, and at the present pace fully replacing the city’s ageing pipe network would take almost two centuries. There is an estimated electricity infrastructure backlog of R44bn, and 54,132 power outages were recorded between July and December 2025.

No amount of private spending arrests that cycle. Nor can business simply step in where the city has failed: no private investor, development partner or service provider will commit resources to an administration facing financial ruin. The fiscal crisis is a symptom and often a cause of the other failures.

Since 2016 the city has had nine mayors and eight coalitions. No mayor completed a full five-year term. Stable long-term planning has thus all but disappeared, while appointments, priorities and policies have shifted with the political winds.

In many ways Johannesburg is a microcosm of South Africa in 2026. Corruption, criminality, political instability and administrative incompetence have damaged the basic institutions on which growth and development depend. City finances are under severe pressure. Electricity and water services are increasingly unreliable. Infrastructure has deteriorated. The capacity and authority of the municipal administration have been weakened.

The first steps of reform are therefore clear — we have to fix what has been broken. The fundamental functions of the government must be rebuilt for the city to become the place of opportunity, economic dynamism and new development that all its residents and the country so desperately need.

The future of this city is a national concern. Johannesburg remains South Africa’s principal economic gateway to the world and sits at the heart of the country’s urban system. Its success would strengthen the national economy; its continued decline would damage the prospects of the poor, the middle class and business, within the city and countrywide.

More than that: it is the one municipality whose failure would make national success impossible, raising the critical question: if Johannesburg cannot be fixed, can we fix South Africa?

We believe Johannesburg can be fixed, but it will not be easy. In many respects it depends on what happens on November 4, when the local government elections take place. Johannesburg voters must produce a new, stable political leadership that can stay the full term.

The city needs a reforming mayor with a clear diagnosis of what has gone wrong, ready to take effective action and mobilise the best possible people (not only from within political parties) to help fix the city. However, even with honest, competent and committed leadership the city cannot do this alone.

Success will require effective partnerships that build on Johannesburg’s many extraordinary assets, including its vibrant private sector, deep financial markets, many educational institutions and its dynamic citizens and civic organisations. These assets provide the basis for recovery — but only if they are matched by effective governance and bold reforms. And the chances of success will also require a special response from the national government.

More than 20 years ago the Centre for Development & Enterprise (CDE) argued that Johannesburg would rise or fall on its ability to attract, retain and create skilled and entrepreneurial people. That judgment holds true. National economic, social and political recovery needs a prosperous Johannesburg powering growth, investment and employment in the country and the continent.

South Africa cannot afford to let this vitally important city fail.

Bernstein is CDE director. This article is based on Joburg in Jeopardy, the first report in the new CDE series ‘Johannesburg Matters: Fixing South Africa’s Growth Engine’.

This article was first published on Business Day