JOHANNESBURG, GAUTENG — The newly implemented Johannesburg tariff increases are now reflecting on residents’ monthly utility bills, bringing above-inflation hikes to electricity, water, sanitation, refuse removal, and property rates. Group CFO Tebogo Moraka has addressed the financial impact on households, explaining that the steep adjustments are a direct response to rising bulk supplier costs and the urgent need to fund aging infrastructure upgrades across the metropolis.
The Consumer Impact and Bulk Supplier Pressures
The reality of the new municipal billing cycle is already being felt by residents. Moraka provided a practical example of the financial shift: a small flat occupied by one or two people, consuming 250 kilowatt-hours of electricity per month, will now see their bill rise by an additional R56, bringing the total monthly cost to approximately R675.
Defending the above-inflation adjustments, the Group CFO explained that the municipality is largely reacting to massive hikes from its bulk suppliers. On May 1, Eskom increased its bulk electricity tariffs by approximately 9%. Shortly after, on July 1, Rand Water raised its water demand percentage by 11%.
Consequently, City Power’s electricity tariff was adjusted by 8.63%. While this is slightly lower than the national utility’s hike, Moraka noted that sustaining this gap in the future will be difficult. The City is currently engaging with the national energy regulator, NERSA, but emphasized that as a business entity, municipal tariffs must remain cost-reflective to prevent the city from operating at a loss.
Shielding the Vulnerable: Indigent Exemptions
To mitigate the impact on the city’s most vulnerable populations, the municipality has expanded its indigent support policies. A major point of contention has been the R200 fixed electricity charge. Moraka clarified that Johannesburg was actually one of the last metropolitan areas to introduce this fee, which is standard across other metros and at Eskom, to maintain network infrastructure.
However, registered indigent households are completely shielded from this fixed charge. City Power has launched an aggressive campaign to update the indigent register. Residents can apply for this exemption at any City of Johannesburg (COJ) regional office. The application requires proof of income and household size, data that is necessary for the National Treasury to build its national database and statistics.
Tackling the R71 Billion Debt Mountain
The tariff hikes arrive as the City navigates a staggering R71 billion total debt pile. Moraka acknowledged the harsh economic climate but stressed that a culture of non-payment is unsustainable and hampers service delivery.
To combat historical arrears, the city council recently approved a new debt rehabilitation program. Available both online and at regional offices, the initiative allows residents to wipe out past debt—such as arrears accumulated during the 2021 and 2022 pandemic lockdowns—provided they commit to keeping their current accounts up to date moving forward.
Moraka also clarified the composition of the city’s debt. While the total debt stands at R71 billion, the actual loan book is around R22 billion. This translates to a debt-to-revenue ratio of just 29%, which is well below the National Treasury’s maximum allowable threshold of 45%.
Enforcing Service Delivery Accountability
Addressing resident frustrations over paying for unrendered services, Moraka pointed to a newly established service delivery “war room” managed by the Chief Operating Officer. The city is implementing Single Point of Management Accountability (SPMA) to hold specific individuals and entities strictly responsible for service failures.
While the City maintains that water and electricity uptime consistently exceeds 95%, isolated failures are being met with severe consequences. Moraka revealed that recent arrests have been made at City Power involving staff implicated in illegal disconnections and reconnections. Furthermore, the municipality has terminated contracts with certain Pikitup refuse collection service providers who deliberately delayed fixing faults to claim excessive overtime pay.
To streamline fault reporting, residents are urged to download the Central Service Delivery (CSD) app, available on both Apple and Android platforms. The interactive application allows users to log faults directly, with the municipality committing to a maximum 24-hour response time to resolve logged issues.
Return to Capital Markets and Future Outlook
In a major financial milestone, the City’s bonds have been reinstated on the Johannesburg Stock Exchange (JSE). Because the municipality was previously suspended from the capital markets, the lifting of this ban now opens the door for crucial private funding.
Moraka highlighted that the return to the JSE will heavily support public-private partnerships for Joburg Water. These projects will focus on critical pipe replacements, water reclamation, and wastewater treatment, attracting both local and international investment.
Looking ahead, the City is actively engaging with credit rating agencies to reflect its improved financial management. Moraka indicated that an upcoming assessment by Moody’s is expected to evaluate the municipality’s stabilizing governance structures, with the results anticipated to provide a clearer picture of the City’s financial trajectory in the coming weeks.