MOODY’S REVISES CITY OF JOHANNESBURG OUTLOOK TO POSITIVE AFTER RATING CONFIRMATION
JOHANNESBURG — Moody’s Ratings has stabilized the City of Johannesburg’s financial position by confirming its credit ratings and revising its outlook from "under review" to "positive." The decision officially closes out a review for a possible downgrade that the rating agency opened in April 2026.
Moody's confirmed the City’s long-term issuer rating at Ba3 and its national-scale rating at A1.za, while affirming its short-term issuer rating at Not Prime.
A Turnaround in Regulatory Compliance
The positive rating action follows a turbulent period for the metro. In May 2026, the Johannesburg Stock Exchange (JSE) suspended trading of the City's debt instruments due to delays in submitting its financial data. The JSE lifted the suspension after the City finally published its outstanding audited financial statements for the 2024/25 financial year, securing an unqualified audit opinion.
Despite the administrative delays, Moody's noted that the City maintained absolute financial reliability, servicing R159.1 million in principal and R272.2 million in interest in full and on time throughout the suspension period.
Executive Mayor Dada Morero acknowledged the initial delay as a serious governance failure for which the administration took full responsibility. He stated that the corrective actions taken—restoring JSE compliance and finalizing the audits—directly prompted Moody's favorable review.
Economic Strengths Balanced Against Liquidity Risks
The rating agency highlighted the fundamental resilience of Johannesburg’s economy, which generates roughly 15% of South Africa’s Gross Domestic Product (GDP).
The City’s financial metrics showed robust operational performance, bolstered by higher electricity revenues resulting from reduced national load-shedding. The metro's operating balance for the 2024/25 financial year stood at approximately 11% of operating revenue, while its overall debt burden remained moderate at around 28% of operating revenue.
However, the report also flagged persistent concerns regarding the City's internal governance controls and cash liquidity. Mayor Morero accepted these criticisms, committing the metro to strengthening financial reporting, refining budget monitoring, and aggressively building up its cash reserves in the coming months.
Infrastructure Impacts for Residents
Mayor Morero emphasized that the credit rating directly impacts the daily lives of residents by dictating the interest rates the City pays to borrow money.
A confirmed rating with a positive outlook ensures that Johannesburg can continue to finance major infrastructure programs—including the construction and maintenance of roads, water networks, and the electricity grid—on reasonable financial terms.
The positive adjustment also reflects broader improvements at the national level, following a similar shift to a positive outlook for South Africa’s sovereign rating. Moody's indicated that further upgrades for Johannesburg will depend on continued governance improvements and national economic stability, while any deterioration in liquidity or a national sovereign downgrade could trigger downward pressure.
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