The City of Johannesburg Metropolitan Municipality will require an estimated R64 billion to address means to repair and upgrade its struggling water infrastructure, according to Finance Minister Enoch Godongwana.
Delivering his Budget Speech on Wednesday, Godongwana said that while national government can step in to assist, municipalities must end the practice of diverting revenue collected for basic services to fund unrelated functions.
He noted that although residents pay roughly R11.9 billion annually for water, only a fraction of that is reinvested into the system. Just R1.3 billion is allocated to Johannesburg Water for capital expenditure.
“Although you have paid for water, it does not mean that the money you have paid for water is going to maintain water services,” the minister said, explaining that the funds are pooled into general municipal accounts. “What comes out to maintain water services is only about a billion rand. The implications are poor services and a lack of maintenance.”
He warned that this funding model has contributed directly to the city’s growing backlog, now estimated at R64 billion, needed to restore reliable supply.
“If this practice continues, maintenance backlogs will grow, services will deteriorate and critical infrastructure systems will eventually collapse,” Godongwana cautioned.
To tackle the issue, Treasury has allocated R27.7 billion over the medium term to a performance-linked reform programme targeting metro trading services such as electricity, water, sanitation and waste management. The initiative is designed to ensure revenue collected for services is reinvested into those same services.
Under the new framework, municipalities that fail to meet operational and reform targets risk having their budgets reduced.
The reforms aim to strengthen governance and accountability while enabling sustainable, long-term infrastructure investment. Qualifying metros, including eThekwini Metropolitan Municipality and Johannesburg, have begun implementing council-approved plans to ring-fence revenue and channel funds back into water and electricity systems.
Water expert Mike Muller said the current funding structure remains opaque, with water revenue collected by Johannesburg Water transferred to city-controlled accounts.
He argued that the utility’s finances should be ring-fenced to ensure transparency and consistent reinvestment.
“The money that comes for water must go for water and be accounted for as such,” Muller said, adding that clearer financial controls would support turnaround plans, infrastructure repairs and smarter operational spending.
He also warned that cross-subsidisation has limited the entity’s ability to hire essential staff, further hampering service delivery.
While the reforms promise a more disciplined approach to spending, residents may be hoping the taps start cooperating sooner rather than later.