Moody's has affirmed Johannesburg's long-term issuer rating at Ba3 and revised its outlook to positive. This decision indicates that Moody's believes the city's financial position is likely to improve over the next 12 to 18 months, increasing the chances of a future ratings upgrade. This positive outlook is seen as an endorsement of the city's financial resilience and economic strength, and is expected to boost investment and confidence in Johannesburg's efforts to stabilize its finances and strengthen governance systems.
The review of Johannesburg's credit rating was initiated in April due to delays in producing audited financial statements and the subsequent suspension of its debt instruments by the Johannesburg Stock Exchange (JSE). The JSE lifted the suspension in May after the municipality received an unqualified audit opinion from the Auditor-General of South Africa. Despite these issues, the city successfully met its debt obligations, servicing R159.1 million in principal and R272.2 million in interest during the suspension period.
Johannesburg Mayor Dada Morero and City Manager Floyd Brink celebrated the announcement, recognizing that while governance improvements remain a priority, the outcome confirms the city's financial stability and commitment to reforms. Moody's indicated that an upgrade would be considered if the municipality addresses its budgeting shortfalls and the financial irregularities highlighted earlier. This positive development follows a period where the city faced an unfunded budget gap of approximately R2.1 billion ($128 million) and concerns about its liquidity, including having only five days of cash to cover costs in March, far short of the National Treasury's 30-day benchmark.
