The water challenges blighting South Africa’s economic engines of Johannesburg and Durban are due to sheer mismanagement and threaten business continuity across sectors, Business Leadership South Africa (BLSA) CEO Busi Mavuso has warned.
Business Day reported on Monday that the National Treasury was cracking down on municipalities that were underperforming on their budgets after figures from the second quarter of the 2025/26 financial year pointed to underspending by many, including in the critical water management sector.
Released in a report last week, the data shows that the country’s eight metros — Joburg, Tshwane, Ekurhuleni, Cape Town, eThekwini, Nelson Mandela Bay, Buffalo City and Mangaung — collectively spent only 31.5% of their R5.8bn budget on treatment works, pipelines and reservoirs, bulk water supply infrastructure and network upgrades by the end of the three months to December 31 2025.
Water is supposed to be self-sustaining in South Africa, with revenue from its sale paying for infrastructure maintenance. Instead, that revenue is being diverted elsewhere, leaving nothing for essential upkeep.
— BLSA CEO Busi Mavuso
In her weekly newsletter on Monday, Mavuso said she was struck by recent comments from department of water and sanitation director-general Sean Phillips.
“He cited that the Johannesburg metro cannot even afford to transport workers to sites to fix leaks. Joburg loses about 35% of its water to leaks, compounding its financial predicament. eThekwini is worse, losing about half its water. This is nothing other than mismanagement,” she said.
“Water is supposed to be self-sustaining in South Africa, with revenue from its sale paying for infrastructure maintenance. Instead, that revenue is being diverted elsewhere, leaving nothing for essential upkeep.”
The power and water outages in Gauteng, the country’s economic and financial hub, prompted President Cyril Ramaphosa to establish a national water crisis committee, which he will chair, to address the severe water supply issues in Joburg and other parts of the country.
This as the country marks National Water Month, from March 1-31, aimed at promoting water conservation, highlighting infrastructure development and mobilising all South Africans to protect and preserve the country’s limited water resources.
Mavuso’s remarks come as the National Treasury is set to launch metro trading services reforms in Pretoria on Wednesday. Business Day reported previously that the Treasury was working with the metros on a R54bn performance-based incentive that would help them with cash to fix water, electricity and waste management services on the condition they ring-fence revenue from those services in professionally run utilities that can ensure service delivery.
“Water infrastructure collapse threatens business continuity across sectors. Manufacturing plants face production shutdowns. Hotels and restaurants struggle with inconsistent supply. Commercial property values decline when tenants can’t rely on basic services. Agriculture faces irrigation uncertainties,” Mavuso said.
“Retail centres dependent on municipal water face operational disruption. Beyond immediate operations, deteriorating municipal financial health signals rising rates and service charges even as service reliability worsens. The auditor-general’s review of 2023/24 municipalities found only 41 of 257 had clean audits, noting that ‘local government remains in a dire state’. The problem is systemic.”
Mavuso said she was worried in an election year that “the political logic won’t favour improved governance but rather desperate extraction while incumbents still have power. Political scientists call this ‘lame duck looting’ — when political incumbents facing a high risk of losing the next election maximise short-term extraction over long-term service delivery.
“Maintenance delivers longer-term payoffs in improved reliability that earns votes. But where that’s no longer politically viable, the alternative is maximising extraction before losing power. This accelerates the downward spiral precisely when businesses need stability most,” she said.
“One notable exception demonstrates what’s possible. Cape Town has roughly the same population as Johannesburg, but had a capital budget of R12.1bn last year compared to Johannesburg’s R7.1bn. It’s the only metro with a clean audit,” Mavuso noted.
“Cape Town’s water and sanitation directorate spent 94.1% of its capital budget — more than the combined spending of Johannesburg and eThekwini. That spending delivers service levels that satisfy the public. The contrast shows the problem stems from choice, not inevitability.”
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