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RATINGS agency Fitch has confirmed Johannesburg’s current status, reflecting a confidence in the City to manage the financial affairs of South Africa’s largest city.

Good news for City manager Trevor FowlerGood news for City manager Trevor FowlerCity manager Trevor Fowler has welcomed the decision.

In terms of the Fitch ratings Johannesburg has a long-term local currency rating at 'BBB+';  a national long-term rating at 'AA-(zaf)';  and national short-term rating at 'F1+(zaf)'. The outlooks are stable.

The rating affirmation reflects the continued improvement in Johannesburg’s liquidity and working capital in line with expectations, as well as moderate borrowing, which has stabilised debt at around 45% of revenues and equal to less than 10 years of the current balance, according to Fitch.

Fowler says the City notes the concerns raised about tax and fee collection rates but is confident that the consolidation of the new systems in its revenue department is yielding a positive trend.

Fitch has indicated an operating margin improving towards 15% and a debt-to-current balance strengthening below five years could lead to a future upgrade in the ratings, he noted.

The Fitch report makes positive remarks on the City’s progress in consolidating its capital budget. With investment declining to pre-2010 world cup levels of R4-billion Johannesburg has posted its second consecutive year of overall balanced budget, according to Fitch's calculations.

Joburg’s finances are in a healthy state, member of the mayoral committee for finance Geoff MakhuboJoburg’s finances are in a healthy state, member of the mayoral committee for finance Geoff Makhubo"The report confirms that Johannesburg’s finances are in a healthy state despite the impact of the global recession," said the member of the mayoral committee for finance Geoff Makhubo.

"This confidence is also reflected in the decisions of fund managers in the private sector who have in the past year participated in the municipal bonds issued by the City.'

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