On 7th April 2022, Moody’s adjusted the taken rating action on the City of Johannesburg (The City), following the affirmation of Ba2 rating, of the Government of South Africa and the change of outlook to stable.

Moody’s has taken the following rating actions:

• Affirmed the Baseline Credit Assessment of Ba3, the Long-Term Global Scale Rating and National Scale Rating issuer ratings of Ba3/A1.za for the City of Johannesburg and changed the outlook to Stable from negative.
• Moody’s also affirmed the Short-Term National Scale Rating of P-1. za and affirmed the Short-Term Global Scale Rating of NP.

The Affirmation of the ratings with a stable outlook, reflects Moody’s expectation that the City’s credit profile will remain in line with its current rating levels. The rating action on South Africa’s sovereign also points to improvements in the operating environment while structural sector challenges remain for the City.

Moody’s cited that the affirmation of City of Johannesburg’s Ba3 reflects Moody’s expectation that the operating environment will improve slightly as the national and local economies recover from the pandemic. Significant structural challenges continue to weigh on the ratings of the City of Johannesburg which achieve moderate operating performance for the fiscal year ended 2021.

The City has consistently demonstrated its financial resilience as evidenced by the generation of recurring surpluses, maintenance of substantial cash balances, maintenance of stable debt ratios and the continued roll out of the capital expenditure program. All of this has been achieved within the context of a deteriorating global economic environment.

• The City of Johannesburg achieved the following in 2020/21:
• A strong financial position with a surplus of R3.9 billion, a R0.8 billion increase from R3.1 billion.
• A positive cash balance of R6.6 billion from R5.6 billion in 2019/20.
• R6.9 billion (91%) spent of the approved capital budget of R7.6 billion (adjusted).
• A progressive increase in the City’s total assets by 5% compared to 3.5% in 2020.
• Increased in total revenue by 6% compared to 4.9% in 2020.
• Achieved a revenue collection rate of 90.3% against a target of 88.9%.

ENDS

Issued by the MMC Finance, Cllr Julie Suddaby

For more information, or an interview with MMC Suddaby on the Debt Rehabilitation Program, please contact:

Michelle Ashburner
Deputy Director: Communications and Stakeholder Management
MichelleA@joburg.org.za | 071 222 0977

14/04/2022