Rating agency Global Credit Ratings Co. has given the City of Johannesburg a long-term national scale issuer rating of AA(ZA), and a short-term rating of A1+(ZA) with the outlook is accorded as stable.
The rating means the City has a ‘very high credit quality’. The agency said protection factors are very strong and that adverse changes in business, economic or financial conditions would increase investment risk, although not significantly.
Executive Mayor Herman Mashaba said despite the challenges faced by the City, this rating demonstrates the confidence which investors can place in the financial position of Johannesburg and its potential for growth.
“The City has consistently demonstrated its financial resilience as evidenced by the generation of recurring surpluses, maintenance of healthy cash balances 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,” he said.
The credit rating agency said Johannesburg is the economic heartland of South Africa, with a diverse economy accounting for around 15 per cent of the country’s GDP. And social indicators are mainly above the national average, it reported.
The mayor thanked both the MMC for Finance, Funzela Ngobeni, for his efforts and law-abiding Joburg residents.
He also said that this goes to show that the City is not in a financial crisis, as predicted by the African National Congress (ANC).
The ANC has been warning resident for quite some time that there is financial instability in the City, which stands at imminent collapse.
The mayor has continued to deny this, highlighting instead that there have been significant strides made.
“The City has begun to demonstrate economic strength by achieving two consecutive quarters of job creation, seeing 109 000 new people entering the job market.”