Johannesburg faces R2.1bn funding gap as its bills mount

By Prinesha Naido

Johannesburg is starting a new financial year with a multibillion-rand budget that’s not fully funded, potentially deepening a crisis that’s already left it unable to pay for power and fuel supplies.

South Africa’s biggest city is facing an unfunded budget gap of about R2.1 billion ($128 million) for the year starting July 1, according to a framework seen by Bloomberg News.

The National Treasury attributed the shortfall to city revenue projections that appear overstated relative to audited results, according to the document.

The metro forecasts an overall budget deficit of R7 billion for this fiscal year.

The Treasury advised city authorities to narrow the gap by improving revenue collection and rationalising the 6-kiloliter free water allowance for non-indigent households.

It also recommended resolving affordability concerns over the second phase of a personnel finance agreement, which requires a binding decision by the city council before the final budget