Johannesburg Council Ratifies R90 Billion Budget Adjustment Amid Critical Revenue Shortfalls and Utility Spending Cuts

Johannesburg approves an adjusted R90bn budget for 2025/2026, implementing cuts to City Power and Water due to revenue shortfalls and rising labor costs.

By: AXL Media

Published: Mar 21, 2026, 5:15 AM EDT

Source: The information in this article was sourced from TimesLIVE

Financial Resilience Tested by Major Mid-Year Budget Realignment

The City of Johannesburg has concluded a contentious deliberative process by greenlighting an adjustment budget exceeding R90 billion for the current financial cycle. Mayor Dada Morero characterized the move as a necessary step toward ensuring the city remains financially resilient despite significant fiscal headwinds. The approval follows an intentional delay by the council, which had previously sought an extension from provincial authorities to allow for a more granular review of the documents. While leadership maintains that the city is moving forward, the adjustments reflect a pragmatic response to the reality of the municipal treasury's current standing as the end of the financial year approaches in June.

Infrastructure Investment Sacrificed to Bridge Revenue Gaps

A critical component of the newly approved budget is a significant reduction in planned expenditure for the city’s primary utility providers. Underperforming revenue collection has necessitated downward adjustments of approximately R767 million for City Power and R575 million for Johannesburg Water, while Pikitup faces a cut of nearly R98.5 million. These reductions come at a time when the city continues to struggle with aging water and sewer infrastructure, including persistent leaks. To mitigate these cuts, the Mayor has indicated that the city is exploring a specialized program to raise capital on its balance sheet specifically targeted at stabilizing the water network.

Labor Cost Surge Poses Risks to Essential Service Delivery

The budget adjustment has highlighted a sharp R1.4 billion increase in employee-related expenses, largely driven by the Politically Facilitated Agreement. This negotiated settlement was designed to rectify historical wage disparities and salary grading inconsistencies, yet its implementation has drawn concern from council members. By shifting funds from operational expenditure to cover these rising personnel costs, the city risks depleting the resources required for day to day service delivery. Council documents suggest that this reallocation of capital may have long term negative implications for the municipality’s ability to maintain standard service levels in future financial years.