City’s upgrade good for the economy, says Gauteng premier Makhura

Gauteng Premier David Makhura on Friday welcomed ratings agency Moody’s Investors Service’ upgrade of the City of Johannesburg by four notches, saying the move was good for South Africa.

“The fact that this rating comes in the midst of a difficult and volatile global and domestic economic outlook is even more encouraging.The overall drive by the country’s national leadership to ensure that South Africa remains a positive investment destination is important for all of us,” Makhura said.

Moody’s on Thursday raised Joburg’s global scale ratings from Baa3 to Baa2, the same level as the sovereign rating, while the city’s national scale ratings was raised by four notches up from A2 to Aa1.

Moody’s said it noted the city’s prudence and consistency in managing its finances.

The global scale rating of Baa2 is the highest possible rating that can currently be achieved by institutions with the best credit quality in South Africa.

Also, the City of Johannesburg is the only Metro to have achieved such a feat of a global scale ratings upgrade in the current round of rating reviews.

Among the reasons Moody’s upgraded Joburg included the City’s improved financial performance in the last three years, the decline in the net direct debt from 35% in 2011 to 30% in 2015, and the R10.2-billion investment on capital infrastructure during the 2015 financial year.

Makhura said the rating demonstrated the important role cities play in a national economy. The city, led by Mayor Parks Tau, contributes 16% to the national economy, he said.