Africa's richest city races to pay $146 million in debts, and unlock $200 million for infrastructure revival

South Africa's richest city is scrambling to restore billions in suspended government funding while preparing to tap the bond market to finance long-overdue infrastructure upgrades.

• Johannesburg is working to restore R3.6 billion in suspended government funding by settling debts and improving financial oversight.
• The South African National Treasury withheld funds from 69 municipalities, including Johannesburg, over concerns of poor financial governance and wasteful spending.
• The city plans to pay R2.4 billion to key creditors by mid-July and must reduce irregular and wasteful expenditure by 25% to unlock all funds.
• Johannesburg is preparing to issue municipal bonds to finance critical infrastructure upgrades, addressing chronic underinvestment.

South Africa's richest city is scrambling to restore billions in suspended government funding while preparing to tap the bond market to finance long-overdue infrastructure upgrades.

The City of Johannesburg says it will begin paying key creditors by next week in a bid to unlock R3.6 billion ($200 million) in withheld government funds, Bloomberg reported.

Earlier this week, South Africa took the extraordinary step of temporarily withholding state funding from 69 municipalities, including Johannesburg, as part of a sweeping crackdown on financial mismanagement that has engulfed dozens of municipalities ahead of November’s local elections.

The move forms part of a broader effort to improve fiscal discipline, reduce irregular spending, and ensure municipalities meet their financial obligations before receiving additional public funds.

Treasury said funding would be released in phases once municipalities submit credible repayment plans and demonstrate progress in improving financial management.

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City moves to settle debts.

Johannesburg Mayor Dada Morero said the city plans to pay nearly R2.4 billion owed to major creditors, including Eskom and Rand Water, by mid-July.

To secure the remaining funding, Johannesburg must also reduce unauthorised, irregular, fruitless and wasteful expenditure by at least 25% before the end of September and formalise repayment agreements with creditors.

National Treasury estimates South African municipalities have accumulated R24.1 billion in irregular and wasteful expenditure since the 2021/22 financial year.

Bond sale to fix infrastructure

Beyond addressing its immediate cash challenges, Johannesburg is also advancing plans to issue municipal bonds to finance the rehabilitation of ageing roads, electricity infrastructure, water systems, and other public assets.

The proposed bond sale comes as the city faces growing pressure to modernise infrastructure that has suffered years of underinvestment, contributing to frequent electricity outages, water supply disruptions, and deteriorating public services.