Surprise Boost for Johannesburg as Moody’s Shows Confidence Amid Crisis
Johannesburg, South Africa’s economic powerhouse, has received an unexpected vote of confidence from Moody’s Ratings, despite growing concerns over its financial mismanagement and failing infrastructure.
Moody’s analysts Irena Krizkovska and Marie Diron said the city’s credit ratings reflect “sound operating performance, moderate debt levels, and a large, diversified local economy”, supported by prudent financial management and strong budget monitoring.
The agency noted that Johannesburg has consistently maintained positive operating margins and moderate liquidity, even as it battles rising debt, infrastructure backlogs, and rapid population growth.
Confidence Amid Controversy
The assessment contrasts sharply with the national government’s warnings and business community concerns about the city’s governance.
In August, Finance Minister Enoch Godongwana demanded an explanation for R24.4 billion in unauthorised, irregular, and wasteful spending, cautioning that the city could lose government funding if the funds aren’t recovered.
A month later, business leaders said they were in talks with government officials about ways to rescue Johannesburg from further decline.
Infrastructure in Crisis
Council documents reviewed by Bloomberg show the city was R221 billion behind on infrastructure maintenance last year, covering water, electricity, and roads — key systems now seen as symbols of Johannesburg’s decay and political instability.
The city, home to 5 million people and responsible for 16% of South Africa’s GDP, also houses the Johannesburg Stock Exchange and many major corporations.
Political Stakes
Johannesburg is run by an ANC-led coalition, whose instability has been blamed for poor governance. The Democratic Alliance (DA) aims to reclaim the city in next year’s local elections by focusing on its decline.
Credit Standing
Moody’s maintains Johannesburg’s long-term rating at Ba3 with a stable outlook — three notches below investment grade, but still higher than any other South African municipality except Cape Town (Ba2), which matches the national rating.
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