No improvements for many Joburg communities as Masuku delivers ‘difficult but honest’ budget speech
· Citizen
The City of Johannesburg’s deputy mayor and MMC of Finance Loyiso Masuku on Wednesday admitted that some communities will not see new investment in infrastructure as the city focuses on paying off its debt.
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In reading off the critical numbers, Masuku stressed that Johannesburg was “not a failed city, but a city under pressure”.
Johannesburg’s municipality will have a capital investment budget of just under R9 billion for the coming year, while needing R220 billion to address its infrastructure backlog.
Masuku announced that the city will have a budget of R97.1 billion for the 2026-27 financial year – an operating budget of R88.3 billion and capital budget of R8.8 billion.
The deputy mayor admitted that the city could not budget its way out its financial problems, outlining the trade-offs the city was forced to implement.
“We must fund what is urgent, protect what is essential, leverage what is possible, and partner where our own resources fall short,” said Masuku.
Recovery over service expansion
Speaking as the MMC, Masuku explained the five broader approaches that will determine how and when the budget is spent.
A large portion of the capital budget – R5 billion – is comprised of conditional grants, which will go to priority projects.
“Every capital commitment must have a named, available and compliant funding source before it can enter the programme,” said Masuku.
Loans account for R3.5 billion of the funds available for capital investment, with Masuku stating projects must “demonstrate improved revenue generation or reduced operational losses”.
Third and fourth stipulations would be the ring-fencing of funds over cross-subsidisation, as well as creditor settlement obligations taking precedence over new projects.
“Some communities will not see new capital investment in 2026-27 because the city is honouring obligations that protect the systems that serve them daily. That is a difficult but honest message,” Masuku said, explaining the latter.
That message was the foundation of the fifth “trade-off”; a prioritisation of fiscal recovery over service expansion.
“Every commitment has a funding source. Every project has a compliant justification. This is what a funded budget looks like,” explained the Finance MMC.
60% to be invested in marginalised areas
Notable entity-specific operating budgets include R28.3 billion to City Power, R21.6 billion to Johannesburg Water and R5.2 billion to Pikitup for landfill rehabilitation.
Qualifying indigent households will receive free water, electricity and sanitation, with the city aiming for 12 250 part-time job opportunities through the Extended Public Works Programme.
Additional goals include 5 250 households connected to water and sanitation, the construction of 2 500 social housing units and the issuing of 2 000 title deeds in high density residential zones.
“The true purpose of government is to improve the lives of people. The 2026-27 budget places strong emphasis on community upliftment and inclusive development,” said Masuku.
To emphasise this, she stated that 60% of capital projects will be directed to historically marginalised areas.
On the multi-year R10 billion deal with the South African Municipal Workers Union (Samwu), Masuku said the payout was necessary to address historic disparities.
“Our workforce is our most valuable resource and must be adequately compensated.
“The ANC-led government of local unity has demonstrated its commitment to ensuring that workers receive fair compensation with the intention of accelerating service delivery, strengthen revenue collection and improve customer interface through a motivated and skilled work force,” Masuku said.
Debate to follow
Masuku’s budget was in line with Integrated Development Plan figures, and councillors will debate the budget on Thursday morning.
Civil society group Johannesburg Crisis Alliance (JCA) believes there are funding risks and inconsistencies in the budget that may leave it subject to a legal challenges on the basis that it did not meet Municipal Finance Management Act (MFMA) standards.
“The city cannot ask residents to carry the cost of a budget that appears unstable, under-justified and potentially unlawful if adopted without correction,” stated Yunus Chamda, JCA Coordinator.
The alliance has asked National Treasury to confirm if the budget was procedurally compliant with the MFMA, as well as for the Department of Cooperative Governance and Traditional Affairs to confirm if the budget is sustainable.
“Residents should not be expected to absorb the consequences of a budget that appears to shift risk onto communities while leaving serious questions of affordability, credibility and accountability unresolved.
“The defects in this budget must be fixed before adoption, not after the damage is done,” Chamda said.