Gauteng in Financial Crisis: Can South Africa’s Economic Hub Recover?

Gauteng, South Africa’s economic powerhouse, is facing a financial crisis that could derail service delivery and threaten its future stability. Finance MEC Lebogang Maile has sounded the alarm, warning that the province is on the brink of a liquidity crisis if drastic cost-cutting measures are not implemented.

Billions Budgeted, But Debt Looms Large

In his Medium-Term Expenditure Framework (MTEF) Budget speech on 18 March 2025, Maile revealed that the province will spend R527.2 billion over the next three years to stimulate economic recovery. However, despite this massive budget, the province’s finances are under severe strain.

With liquidity pressures escalating, Gauteng’s net cash balances are projected to turn negative by the 2025/26 financial year. To avoid a full-blown fiscal crisis, Maile has proposed compulsory baseline reductions across all departments.

“Failure to act decisively – through expenditure oversight, keeping the overall wage bill under control, and exploring alternative funding models – will risk deepening the liquidity crisis,” Maile warned.

If the situation worsens, service delivery across Johannesburg, Pretoria, and other Gauteng cities will be severely impacted.

E-Tolls Debt and Wasteful Spending Worsen Crisis

One of the biggest financial burdens on Gauteng is the R20 billion debt from the failed e-toll system. The province paid its first installment of R3.8 billion to SANRAL in September 2024, adding more strain to its already stretched finances.

Maile echoed concerns raised by Finance Minister Enoch Godongwana, who has criticized how government budgets grow incrementally without assessing changing needs. This has led to inefficiencies, misaligned spending, and waste, with billions allocated to projects that fail to deliver real impact.

Gauteng Under Fire Ahead of G20 Summit

The crisis comes at a time when Gauteng is under intense scrutiny, with President Cyril Ramaphosa urging provincial officials to resolve critical issues ahead of the G20 Summit in November 2025.

“The environment that one observed was not a pleasing environment… If we do not move with speed to address these challenges, we risk undermining our progress,” Ramaphosa stated.

Gauteng is grappling with:

• Unemployment at crisis levels
• Deteriorating infrastructure, with pothole-ridden roads
• Water and electricity outages
• Rampant crime, making some areas unsafe
• Political instability, with leadership changes creating uncertainty

Johannesburg: A City in Decline

The largest city in Gauteng, Johannesburg, is at the center of the crisis. Years of municipal mismanagement, corruption, and lack of leadership have resulted in:

• Water shortages due to aging infrastructure and poor planning
• Unmaintained roads and non-functional traffic lights causing daily congestion
• A high turnover of mayors, making long-term planning impossible

According to Dr. Ferrial Adam, executive manager at WaterCAN, the problem is a crisis of leadership.

“The City of Johannesburg has had a revolving door of mayors that resembled a game of musical chairs. This affects governance across all areas of the city,” she said.

With crime, corruption, and political infighting defining the city’s administration, urgent national intervention may be required to prevent total collapse.

What’s Next for Gauteng?

The Gauteng government has a narrow window to prevent financial disaster. If spending is not controlled and inefficiencies addressed, the province risks economic stagnation, failing service delivery, and increased instability.

With South Africa’s richest province running out of money, tough decisions lie ahead. Will Gauteng’s leaders step up to the challenge, or will the province spiral further into financial turmoil?

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