With municipalities such as Johannesburg and eThekwini losing about 35% to 50% of treated water to leaks owing to mismanagement, this foregone revenue is not spent on essential maintenance, creating direct business continuity risks across sectors.

In her latest weekly newsletter, Business Leadership South Africa (BLSA) CEO Busi Mavuso, highlights comments made by Water and Sanitation Department director-general Sean Phillips about the “vicious downward spiral” facing water services in many municipalities.

Mavuso notes that he cited that the Johannesburg metro cannot even afford to transport workers to sites to fix leaks. She posits that Joburg loses about 35% of its water to leaks, compounding its financial predicament, while eThekwini loses about half its water.

“This is nothing other than mismanagement. Water is supposed to be self-sustaining in South Africa, with revenue from its sale paying for infrastructure maintenance. Instead, that revenue is being diverted elsewhere, leaving nothing for essential upkeep.”

Mavuso argues that businesses face the consequences, adding that water infrastructure collapse threatens business continuity across sectors.

In this vein, she notes, for example, that manufacturing plants face production shutdowns, while hotels and restaurants struggle with inconsistent supply.

Additionally, she says commercial property values decline when tenants cannot rely on basic services, adding that agriculture faces irrigation uncertainties, while retail centres dependent on municipal water face operational disruption.

“Beyond immediate operations, deteriorating municipal financial health signals rising rates and service charges even as service reliability worsens.”

Mavuso notes that the Auditor-General's review of 2023/24 municipalities found only 41 of 257 had clean audits, noting that "local government remains in a dire state".

“The problem is systemic,” she argues.

She further expresses concern that, as this is an election year, there is unlikely to be improved governance, as politicians seek short-term solutions to gain citizens’ votes.

Meanwhile, Mavuso says one notable exception demonstrates what is possible in municipalities.

She points out that Cape Town has roughly the same population as Johannesburg, but had a capital budget of R12.1-billion last year compared with Johannesburg's R7.1-billion.

She notes that Cape Town is the only metro with a clean audit, adding that Cape Town's water and sanitation directorate spent 94.1% of its capital budget – more than the combined spending of Johannesburg and eThekwini.

“That spending delivers service levels that satisfy the public. The contrast shows the problem stems from choice, not inevitability.”

Mavuso argues that the country has institutions designed to ensure clean governance.

She says accounting officers can be held personally liable for irregular expenditure.

She expresses that Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa is focused on improving local government performance and has engaged business leaders on collective action.

She notes that BLSA is actively supporting municipal capacity, particularly for infrastructure development and maintenance.

Mavuso says Operation Vulindlela has proactive policies to ringfence utility revenue for infrastructure maintenance, adding that the Special Investigating Unit can investigate suspected corruption through presidential proclamation.

“The problem is that these interventions are designed for longer-term systemic improvement or after-the-fact accountability.

“Most act only after investigations conclude and charges are prosecuted. At this moment, with election-year pressures accelerating deterioration, we need proactive vigilance that prevents damage rather than prosecuting it afterwards.”

Mavuso argues that civil servants must recognise that they carry responsibility for appropriate spending.

“That risk does not change with political transitions.

“We need the treasuries and auditors in provinces, the police and investigative institutions to be particularly alert at this moment. They carry the hopes of many to ensure clean governance, ultimately enabling the taps to work and electricity to be available.”

Mavuso adds that the media plays a vital role in keeping the public informed.

“I hope our investigative journalists will leave no stone unturned in exposing emerging malfeasance. Citizens carry the ultimate responsibility to be vigilant. Their votes are the ultimate check on political power.”

Additionally, Mavuso says business also has a critical role to play in this moment, emphasising the importance of supporting the institutions working toward improved municipal capacity and governance.

Hence, she argues that collective action through organisations such as BLSA can achieve what individual companies cannot.

“Where we have significant operations, business must engage municipal leadership to ensure infrastructure maintenance is prioritised. Our voice matters in decisions that affect service reliability,” she says.

“We cannot afford to watch this crisis unfold passively. The taps failing and lights going out don't just affect households.

“They shut down businesses, eliminate jobs, and destroy the economic foundation that funds the very services we need. Heightened vigilance from all of us – civil servants, investigators, media, citizens and business – is what this moment demands,” she urges.