Some South African Cities Are `on Brink of Collapse,' Nene Says

(Bloomberg) -- Some South African cities are “on the brink of collapse” and “can’t be allowed to fail,” Finance Minister Nhlanhla Nene said.

Some municipalities need to be pulled back from the brink of financial ruin, he told city managers at a seminar in Johannesburg Monday.

Slow economic growth and years of mismanagement at some state companies and municipalities have weighed on government revenue and stretched the nation’s finances. Delinquent cities owe utility companies such as power provider Eskom Holdings SOC Ltd. billions of rand, worsening their ability to deliver services.

Support for the ruling African National Congress fell in local elections in 2016, with the party losing control of the capital, Pretoria, and the financial hub, Johannesburg. Disenchanted voters fled to opposition parties amid increasing protests over a lack of services such as housing, water and sanitation, an unemployment rate of about 27 percent.

©2018 Bloomberg L.P.