Troubled waters: The paradox of resilience without governance

7 October 2026
2 min read

South Africa's water sector stands at a critical juncture. While key institutions such as Rand Water, uMngeni-uThukela Water and the Trans-Caledon Tunnel Authority (TCTA) continue to demonstrate financial resilience, the broader sector is under increasing pressure from deteriorating infrastructure, mounting municipal debt and persistent governance challenges.

Futuregrowth's latest review that South Africa's water challenge is not simply one of infrastructure investment. Rather, it is increasingly a challenge of governance, accountability and institutional sustainability. The review highlights a growing disconnect between the financial strength of certain water infrastructure entities and the deteriorating ecosystem in which they operate.

KEY FINDINGS:

Municipal debt to water boards: R25.53 billion

Debt owed to water boards has more than tripled since 2018; approximately 70%.
Non-revenue water: 47.3%

Almost half of treated water fails to generate revenue because of leaks, illegal connections, metering failures and other losses.
Irregular expenditure: 41%

Irregular expenditure across water boards rose from R2.2bn to R3.1bn year on year.
1 0f 7 receive clean audit

Only Overberg Water received a clean audit outcome for the 2024/25 financial year.
Investor stewardship

M&G Investments and Futuregrowth wrote directly to the Minister of Water and Sanitation regarding governance at uMngeni-uThukela Water.

The review concludes that sustainable investment in the sector depends on more than capital alone. Long-term water security will require stronger institutions, improved accountability and the effective deployment of capital across the water value chain.

Why financial strength alone does not guarantee investability

Water has become one of South Africa's most pressing infrastructure challenges. Across the country, communities continue to experience intermittent supply disruptions, increasing infrastructure failures and declining service reliability.

Municipalities face mounting financial pressure, wastewater systems are deteriorating and the cost of rehabilitating ageing infrastructure continues to grow. Against this backdrop, concerns about long-term water security have moved from a technical discussion among engineers and operators to a national economic and developmental issue.

Yet a closer examination of South Africa's major water infrastructure institutions reveals a more nuanced story than the headlines might suggest.