South Africa, with assistance from the World Bank, has launched a $3 billion (R54.6 billion) initiative aimed at reversing the decline in services and infrastructure in eight of the country’s largest cities.

The programme will leverage a $1 billion loan from the World Bank, along with $2 billion from government funds, to provide grants to cities such as Johannesburg, Durban, and Cape Town, which meet specific targets in delivering water, sanitation, electricity, and solid-waste management under a new government scheme, according to Bloomberg.

In response to an inquiry, the World Bank explained that the initiative “consists of a new, targeted performance-based fiscal transfer” to municipalities. It will “support reforms in the trading services” cities charge residents for, it added.

The government is introducing the Metro Services Trading Programme amid growing pressure from citizens.

In the 2024 elections, the African National Congress lost its outright majority for the first time since the end of apartheid, partly due to dissatisfaction with the quality of service delivery.

“South Africa’s metros are facing a crisis in the provision of basic services, marked by declining safety, reliability, and accessibility,” the World Bank said in a report about the programme. “Urgent action is needed to reverse the collapse of urban services.”

The programme will focus on cities where 22 million people, or more than a third of the country’s population, live across an area of almost 30,000 square kilometres.

Currently, South Africa’s government allocates funds to municipalities for infrastructure investments, but there has been no incentive based on performance.

The new initiative “will involve a combination of grant reforms together with the provision of conditional financial incentives that encourage municipalities to aggressively target the challenges affecting service delivery,” the World Bank stated.

The National Treasury did not respond to a request for comment. However, it mentioned the incentive-based programme in its budget statement earlier this month, without providing specifics on the requirements, targets, or funding.

The funds will be in addition to approximately $6 billion sourced from revenue generated by metropolitan areas and their borrowing, making for a $9 billion government programme, according to the World Bank.

Its focus will be on improving service delivery, reducing losses in water and electricity, and enhancing revenue collection.

Other municipalities included in the programme are those that oversee cities such as Bloemfontein, Pretoria, East London, Gqeberha, and Ekurhuleni.

Amidst these struggles, President Cyril Ramaphosa announced the establishment of the Presidential Johannesburg Working Group (PJWG) in an effort to resolve the “enormous challenges” facing the city.

The president announced the working group at a meeting between the National Executive and the City of Johannesburg Executive Council earlier in March.

“We would like to implement this collaborative approach in the City of Johannesburg and to do it as underpinned by the District Development Model. We are proposing the establishment of Presidential Johannesburg Working Group.

“This would bring in all levels of government and the expertise of our stakeholders to accelerate service delivery, stabilise the city’s finances and operations, and enable economic growth and job creation.

“We are going to work together to rebuild Johannesburg and to take Johannesburg back to its glory days,” the president said.

A similar approach has been applied in KwaZulu-Natal with the 2024 establishment of the eThekwini Presidential Working Group to turnaround the fortunes of Durban and position it as an investment and tourism hub.

The PJWG will have a special focus on rejuvenating the Johannesburg inner city.

“The infrastructure of this city is archaic. It was built in the apartheid days many years ago and needs to be attended to. We will need to refocus on the rejuvenation of the city.

“This historic part of our city… has been allowed to deteriorate for much too long. Efforts must be taken to make it a liveable, thriving and safe space for all citizens. We must work together to ensure the inner city is primed… to attract new investment and jobs. It is possible.

“I thank the executive mayor and his team for engaging openly and in a collaborative sprit with the Presidency on this support mechanism. It is in this spirit that we will make real strides to unlock Johannesburg’s role as the engine of growth for South Africa’s economy,” he said.

President Ramaphosa noted that the city is facing an array of challenges.

“Johannesburg today faces enormous challenges, ranging from financial and governance instability to rapidly deteriorating infrastructure. Water and electricity interruptions have become the norm. This has an enormous impact on the quality of life of citizens and the operations of businesses.

“The road infrastructure faces tremendous challenges. These include vandalism of traffic lights, dysfunctional street lights and rapidly deteriorating roads and bridges. These are just some of the challenges that are constraining growth in the country’s economic heartland,” he said.

Beyond Johannesburg, cities across South Africa are struggling with the same problems—broken power grids, neglected water infrastructure, deteriorating roads, and widespread service outages.

Water interruptions are frequent, and streetlights and traffic lights are often in disrepair due to vandalism or neglect. This failure to maintain essential infrastructure hampers economic growth and affects the daily lives of residents.