{
  "id": 5983957,
  "title": "Can Johannesburg fix its books before the doom loop wins?",
  "url": "https://urgent.news/2026/09/06/can-johannesburg-fix-its-books-before-the-doom-loop-wins",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-06T13:38:25.000Z",
  "source": {
    "name": "Daily Maverick",
    "slug": "daily-maverick",
    "url": "https://www.dailymaverick.co.za/opinionista/2026-09-06-can-johannesburg-fix-its-books-before-the-doom-loop-wins/"
  },
  "original_language": "en",
  "account": "In Johannesburg, the city has been living in a state of fiscal fiction, spending as if it had the money it has not yet collected from its residents. The Centre for Development and Enterprise (CDE) in South Africa has released a report that reveals the extent of this financial fiction. Ann Bernstein, the founder and executive director of the CDE, has written extensively on various economic and social issues in South Africa.\n\nThe city has been building its entire government system on the assumption that it will collect the money it bills, even though that money may not materialize. This fiscal fiction has a clear mechanism: the City sends out invoices, books them as revenue, builds a budget based on the assumption that the money is coming, and then spends as though it is already in the bank. In the last three years for which audited financials are available, Johannesburg booked R218-billion in revenue but collected only R205-billion in cash, resulting in a R13-billion shortfall.\n\nWhen you remove the R17-billion in borrowings over that same period, cash receipts become R30-billion less than revenues. This fiscal fiction is not merely a matter of accounting; it has significant consequences for the functioning of the city. Gross unpaid bills owed to the City have increased from around R15-billion in 2014/15 to nearly R72-billion, with a growth rate of 17% per year for 10 consecutive years. By 2024/25, one rand in every six billed will not be paid.\n\nThe impact of this unpaid debt is alarming, as it fuels a fiscal downward spiral. As more customers default on their payments, the City increases tariffs for those who continue to pay, pushing more households and firms toward default or exit. This vicious cycle forces further tariff increases on a shrinking compliant base, while the working-age population has grown by more than 750,000 over the past decade, and job growth has been sluggish, increasing by only 30,000.\n\nThe consequences of this fiscal fiction are evident in various aspects of the city's services, particularly in utilities such as electricity and water. The share of City revenue allocated to electricity has fallen from 34% to 28% over the past decade, not because Johannesburg is selling power more cheaply, but because customers are leaving the grid in search of alternative, more reliable sources. Water bills have also been growing at an alarming rate, with unpaid water bills increasing at 20% per year. The deteriorating state of Johannesburg's infrastructure, particularly its water system, poses an existential threat to the city.",
  "summary": "It has a name: fiscal fiction. Spending as though the cash were already in the bank. But increasingly, it isn’t. A new report from the Centre for Development and Enterprise shows just how far Johannesburg has let that fiction run.",
  "key_points": [
    "Johannesburg finances based on uncollected revenue, not actual cash receipts",
    "R13-billion shortfall in last three years, R30-billion less than revenues after borrowings",
    "Unpaid bills and debts fuel fiscal downward spiral, increasing tariffs and default rates"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}