Joburg crisis demands capable leadership, not just financial rescue - Daily Maverick

Finance minister Enoch Godongwana announced this month that the National Treasury is developing an “intensive intervention” to help rescue Johannesburg. The Treasury intends to work with the City for three years, irrespective of which party emerges from the local government elections on 4 November.

Ann Bernstein is the founder and executive director of the Centre for Development and Enterprise (CDE), a South African development think-tank. She has written extensively on economic growth, unemployment, skills, the state of the nation, and the role of business and markets in development.

The National Treasury’s intervention to rescue Johannesburg is further evidence of the depth of the crisis facing South Africa’s most important city. 

Last month, the Centre for Development and Enterprise’s (CDE’s) research showed that Johannesburg is caught in a dangerous financial spiral: it spends money it does not collect, infrastructure investment has collapsed, and unpaid bills owed to the City have risen from about R15-billion a decade ago to nearly R72-billion.

The Treasury’s interest in the City’s financial future is therefore welcome. 

But money, financial restructuring and better plans will not be enough. There is a fundamental problem that no intervention from the Finance Minister, however well designed or well funded, can solve on its own: somebody in the City administration still has to be capable of getting things done.

The fact is that Johannesburg will not be fixed unless its next government puts capable people in charge of the institutions responsible for running the city. That is the central argument of Kickstarting Delivery – Joburg’s Mission Critical Jobs, the third report in CDE’s Johannesburg Matters series.

The City’s management crisis is severe.

Since 2016 Johannesburg has had nine mayors and eight coalition administrations. At the top of municipal entities, political allegiance has generally taken precedence over the skills and experience required for the job, resulting in frequent turnover of boards.

Cadre deployment is deeply entrenched in Johannesburg’s entities and administration. They have become fiefdoms, each controlled by a different political faction and managed accordingly.

None of the members of the Johannesburg Water board is a professionally qualified engineer, while at least seven of the City’s 24 most senior management positions are occupied by acting appointees.

Johannesburg’s own annual reports point to persistent vacancies among engineers, finance professionals, ICT (information and communications technology) specialists, project managers and supply chain experts.

This matters because running a municipal government is primarily an exercise in implementation. As the prominent cities expert Ed Glaeser has argued, “capacity always eats policy” – a city can have excellent policies on paper, but they mean little if the bureaucracy lacks the people and institutions capable of carrying them out.

City departments and utilities cannot continue to operate as political fiefdoms. Senior appointments and board positions are not bargaining chips to be divided among coalition partners.

This is especially important given the likelihood that coalition negotiations will again play an important role in determining who governs Johannesburg after November. The temptation will be to use control of departments, utilities and boards as currency in those negotiations. That would repeat precisely the pattern that has helped bring Johannesburg to its present crisis.

The incoming administration should therefore make getting the right people into the most important jobs a top priority.

First, the newly elected political leadership must get the appointment of the City Manager right. Johannesburg needs a highly capable city manager selected through a rigorous, transparent and competitive process that is premised on a recognition of the enormity of the turnaround challenge facing the City.

The second priority is the utility boards. The current chairs of these entities are all active or former members of political party structures. That must change. City Power’s chairperson requires strong engineering and energy sector credentials, and Johannesburg Water’s reflecting the technical complexity of the infrastructure challenge it faces. The chairperson sets the governance culture, leads the recruitment of other directors, and is the primary line of accountability between the utility and the shareholder. 

Board members should be appointed on three-year contracts, replacing the annual renewals that have made boards permanently vulnerable to political interference. The entire City Power board was replaced three times in two years, 2020-2022. Once the right chairperson and board are in place (or the core of a new board) they must make sure the best possible CEO is leading the entity. 

Third, it needs to identify the City’s mission-critical positions and conduct an immediate audit of who occupies them, preferably before taking office. The aim would be to establish who the incumbent is, their appointment date, contract type and when it expires. Vacancies and acting appointments in critical positions should then be filled urgently, with particular emphasis on engineering, finance, ICT, project management and procurement expertise.

Where capable officials are already doing good work, the City should retain and support them. A turnaround must not become an indiscriminate purge in which political change automatically produces another wholesale change in personnel. That would simply reproduce the instability of the past under a different government.

However, where senior officials cannot perform at the level required or have been involved in misconduct, the City should use the mechanisms available under existing employment law to address the problem fairly but quickly.

It is vital that Johannesburg breaks the link between political change and administrative appointments. Senior appointments and board positions cannot continue to be treated as political bargaining chips.

Political parties and their mayoral candidates contesting the November election should commit publicly to merit appointments: transparent appointment processes, competitive appointments based on competence, experience and integrity – and to keeping political office-bearers out of procurement, appointments and operational decisions. 

If there is a coalition, this commitment must be a non-negotiable component of the coalition agreement. These commitments would signal a sharp and identifiable break with the practices that have brought Johannesburg to its knees. Voters, media, business organisations and civil society should push candidates and parties to make this public commitment before the elections.

Finding the right people for critical positions will take time. Where infrastructure is at immediate risk, or where the City urgently needs to understand its true financial position, a new administration should look at innovative speedy interventions. 

Some examples. A team of private sector fiscal experts could be brought in on an interim basis to prepare the June 2027 budget; an urgent solution to broken pipes and wasted water could be devised with private capacity and the national department; a team of experienced electricity distribution engineers – including retired Eskom staff – could be contracted for a fixed period to work alongside City Power. 

These interventions could make an immediate difference. It’s vital that each intervention must be governed by targets, deadlines, transparent contracts and full public accountability for money spent and results delivered. No secret deals, no undisclosed arrangements, no conflict of interests.

None of the wider reforms required to turn Johannesburg around will succeed if the institutions responsible for implementing them remain weak, politicised, plagued with corruption and poorly led.

On 4 November, Johannesburg voters will elect a mayor and 270 councillors to govern the City. But the next test comes immediately afterwards. It is who is appointed to run the administration, the utilities and the institutions on which nearly every attempt to rescue Johannesburg will depend.

That will tell us whether Johannesburg has begun replacing government by patronage with government by competence. DM