Shirley de Villiers: Joburg's last rites

Listen here.Johannesburg's mayor Dada Morero delivered his State of the City address from a cathedral this week — complete with a marching band and a reading of the Lord's Prayer. But behind the pageantry, South Africa's biggest city is staring down billions in debt, a crumbling water network, and a power utility threatening to pull the plug. In this interview with Irakli, Currency Senior Reporter Shirley de Villiers picks apart Morero's claims of a fully funded budget and targets met, warning that "it fell apart out of the gates" — from misleading Cape Town comparisons to a city "owed 25 billion by debtors" but with "only 4 billion cash on hand". On Eskom's threat to cut power over a R5.2bn debt, de Villiers is blunt: "Joburg doesn't have the money...I presume it would be rotational power cuts and essentially residents being left in the dark when they have paid for their services." And Joburg, she warns, is no outlier — "116 of them have unfunded budgets, 162 of them are in financial distress...It's the result of poor leadership, poor governance, patronage politics, corruption and ineptitude." With local government elections looming in November, this is almost certainly Morero's last State of the City address — and quite possibly the ANC's last chance to convince residents it can still govern the country's economic heartland. On current evidence, the residents can but pray..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Edited transcript of the interview.Irakli (00:01.378) Johannesburg's mayor delivered his annual State of the City address from a cathedral, no less, complete with a marching band and a reading of the Lord's Prayer. But behind the pageantry, South Africa's biggest city is staring down billions in debt, a crumbling water network and a power utility threatening to pull the plug. Shirley de Villiers has been writing about it for Currency News, and she's here to walk us through it. Hi, Shirley.Shirley De Villiers (00:27.061) Hi, how are you doing?Irakli (00:29.026) Good, thanks. So Shirley, set the scene for us. Why does this particular state of the city address matter?Shirley De Villiers (00:36.203) I think to start off with, it's worth pointing out that all of these state of the city, the province, the nation addresses is, as you said, political pageantry. It's political theatre dressed up as service delivery, where you have authorities trying to show you what they've done over the past year, what they're going to do going ahead. But really, it's just cherry-picking successes and glossing over failures.If we look specifically at the Joburg one and why it's so important, I think that Joburg is the largest city in the country. It contributes 15% to the national GDP. So what happens in Joburg matters and what the mayor of Joburg says matters. Shirley De Villiers (01:20.597) There's also the fact that this is Dada Morero's last address. It's unlikely that he's going to come back for another one. So he obviously, this is his last opportunity to show what he's had to do, what he's done. But essentially, it's all happening in a context of failure. You've got the failure of roads, the failure of water, the failure of electricity. You've got crime, you've got hijacked buildings. And this is the ANC's last chance before the election to really show what it has done. And unfortunately, it didn't really come to the party on that.Irakli (01:51.266) And he also claimed the city's on track, stating that there's a fully funded budget and that he's hitting most of his targets, but you're saying that the numbers don't quite add up. Where does that picture start to fall apart?Shirley De Villiers (02:04.693) Well, it fell apart out of the gates, really, where he decided to make comparisons between Joburg and Cape Town. So he picked up on the last quarterly labour force survey and the fact that Joburg had a 0.9% increase in unemployment, whereas Cape Town's was 1.6. But that's really misleading. If you look at it longer term, Cape Town's unemployment is down over a year, whereas Joburg's is up. Cape Town's unemployment is 13 percentage points lower than Joburg.Joburg's unemployment is higher than the national average. So those numbers just don't really hold up. You've got the fact that he then tried to point to food security and Cape Town being worse than Joburg, with absolutely no grounding in fact. Studies in fact show that food security in Joburg — as many as 30% of the residents of Joburg have at some point experienced food insecurity. You look at healthcare, he seems to believe that the fact that Cape Town has more people on medical aid than Joburg suggests that people aren't checking out of Joburg healthcare, that this is a positive thing, whereas Joburg healthcare — the whole of Gauteng is. So at the very beginning, laying the groundings of his speech, there was this kind of misleading of the numbers. If you look at some of the bigger issues that he brought out, the unfunded budget for a start, he's convinced that the budget is funded, but the finance minister just a few weeks ago said that the adjustment budget was not funded.In fact, Joburg is owed 25 billion by debtors, but it's only got 4 billion cash on hand. There's a 10.3 billion wage agreement that Morero asserted in his address is intact, which means that rates are going to go up, Joburg's going to lose its equitable share for June. So that's problematic. He talked about turnaround plans and the fact that there's this move towards ring-fencing of funds for infrastructure development and maintenance. But this is something that's been on the cards for ages. Joburg Water has been calling on the city for ages for ring-fencing its funds. And the DA took the city to court just two weeks ago because it hasn't implemented its turnaround strategy for Joburg Water. So, you know, there's this implementation gap. Then Dada gets down into the specifics. Shirley De Villiers (04:23.233) He talks about, for example, record-setting water recovery, when the residents of the city would tell you that that's completely ridiculous. He talks about, you know, 724 service delivery cases resolved. But if you look at a study Daily Maverick did, on City Power alone, there were 100,000 calls logged in just nine months. So picking out these small wins doesn't mean much at all.And then there are the delayed projects. So he points to the success of opening 15 BRT stations, but that project has been going since 2009. And the same thing with housing development projects, and the same thing with the city smart meter programme that's been going since 2013. So, you know, it's nowhere really.Irakli (05:12.61) And then there's Eskom, the national power utility that's threatening to cut electricity over unpaid bills. I mean, how big is that hole and what happens to ordinary residents if Eskom actually follows through?Shirley De Villiers (05:25.953) Well, I mean, Joburg is sitting owing Eskom 5.2 billion rand, and that's excluding the current account. So this is a huge problem. Dada Morero didn't seem that fazed by it in his address. He said that, you know, they're in discussions with the electricity minister and with SALGA. But I mean, at the end of the day, Joburg doesn't have the money. So how that problem gets resolved, I don't know — short of coming up with a payment plan, hiking rates for residents, or residents being left in the dark. I presume it would be rotational power cuts and essentially residents being left in the dark when they have paid for their services.Irakli (06:02.894) It sounds pretty dire and it's hard to think about Joburg in isolation here. Is what you're describing unique to the city or is it part of a wider pattern across South African municipalities?Shirley De Villiers (06:14.471) No, I think you just need to take a drive around the country, go to the Northwest, go to the Northern Cape and just see the state the municipalities are in. You know, 116 of them have unfunded budgets, 162 of them are in financial distress. This is not unique to Joburg. It's the result of poor leadership, poor governance, patronage politics, corruption and ineptitude, basically. Obviously, in Joburg it matters a lot because of the economic importance of the city, but it's a widespread phenomenon.Irakli (06:44.43) And looking forward, you mention in the piece that this could well be Morero's last State of the City address, with local elections coming in November. What are you watching for between now and then?Shirley De Villiers (06:57.023) Yeah, so it's pretty obvious this will be Dada Morero's last address. I think with the local government elections coming up, even if the ANC were to cobble together a coalition to lead the city, Loyiso Masuku is the obvious candidate if the party is incapable of bringing in a heavy hitter. Between now and then, though, I think the focus is very much going to be on the mayoral candidates and what they're doing. And the ANC still doesn't have a candidate. They're only announcing one next month. So that's already behind in the campaigning. But I think what we'll need to watch is what it tries to do to make up ground and how it tries to mobilise the city apparatus to make itself look better ahead of the elections. So where it targets its efforts — obviously in the marginal areas, in areas where it's losing support. But essentially, we need to watch how it's trying to shore up support using the resources of the city available to it.Irakli (07:51.64) Shirley de Villiers writes for Currency News. Take a look at the article on our website, BizNews.com. Thanks, Shirley.Shirley De Villiers (07:57.941) Thanks, Irakli.

Shirley de Villiers: Joburg's last rites

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