Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
South Africa’s finance minister Enoch Godongwana said he would reject political pressure to bail out Johannesburg ahead of crucial local elections as he came under pressure to bolster his African National Congress party’s prospects following several severe setbacks at the polls.
The crisis-ridden commercial capital has struggled to provide basic services such as water as it lurched through nine mayors in a decade — many allied with the ANC — and will later this year face a high-profile mayoral challenge from Helen Zille, the chair of the pro-business Democratic Alliance.
The prospect of losing control of the country’s economic powerhouse has pitted Godongwana and other fiscal hawks in the ANC, who have traditionally controlled the finance ministry, against those in the party who support spending money on social programmes and to improve the party’s electoral chances.
Authorities in Johannesburg, a city of 6mn people led by ANC mayor Dada Morero, have pressured the treasury to give it emergency funds. “There are some people who said we must give them money, but I said, ‘No, it can’t work’,” Godongwana told the FT, saying he was protected by a constitutional provision stipulating equal treatment for municipalities.
Still, the government reserved the right to put a failing city into administration, Godongwana said. “There’s a constitutional provision you can utilise to intervene in a municipality so that you re-engineer the finances,” he said, adding that the option was being “looked into”.
His refusal to loosen the purse strings comes against a background of fiscal tightening that has helped South Africa rebuild its macroeconomic credibility, earning the country its first sovereign credit upgrade in nearly 20 years last November.
“I’ve reached the target which means I can deliver a credible path,” he said, referring to three successive primary surpluses that, along with an end to electricity power cuts, had laid the foundation for stronger growth. The economy is expected to grow 1.6 per cent this year, significantly faster than in 2025.
At national level, Zille’s DA is in a 10-party coalition with the ANC, but the veteran politician and former mayor of Cape Town has focused ruthlessly in her campaign on what she characterises as the ANC’s appalling record of service delivery in Johannesburg.
Despite an annual budget of R89.4bn ($5.4bn) — exceeding that of some small African nations — the city council struggles to keep up with basic maintenance.
The water crisis is seen as a particular vulnerability for the ANC in the Johannesburg election. More than 50 per cent of piped water is lost through leaks, and 25 per cent of state schools and 46 per cent of clinics do not have running water, according to non-profit organisation Water Community Action Network.
On one occasion, taps ran dry for days at one of Johannesburg’s largest hospitals. Operations were cancelled while doctors were asked to bring their own drinking water to work.
“Throwing money at the problem is not necessarily a solution,” said Rashid Seedat, executive director of Gauteng City-Region Observatory think-tank. “There are very significant governance challenges in the city in relation to the top leadership.”
The finance ministry was trying to incentivise local governments, including Johannesburg, to “ringfence” the revenue it collected from water rates and plough it back into service provision. Johannesburg, Godongwana said, collected R9bn in water levies every year, but only put R1bn into service delivery.
In February, Panyaza Lesufi, the ANC premier of Gauteng, where Johannesburg is located, drew public outrage when he suggested that he too suffered from water shortages that sometimes obliged him to go to a hotel to shower.
Last week, the ANC gave the DA 12 hours to take down a billboard in which it ridiculed Lesufi’s remarks, threatening court action on the grounds of allegedly violating the electoral code. “The ANC showers in hotels. You have no water. Vote DA to put water in your taps,” the DA billboard and associated social media posts read.
Zille’s campaign has featured a TikTok video of her feet in what appears to be a lake. As the camera pulls back she reveals it to be a burst water main, the results of what she contends are years of ANC neglect.
Credit: Source link
