Bay retains its positive credit rating – Moody’s

The Nelson Mandela Bay municipality has retained its positive credit rating in the latest Moody’s credit opinion for the city’s relatively low debt levels and solid financial performance.

The positive rating of Baa3 stable/Aaa.za – unchanged from the year before – was welcomed by budget and treasury political head Mkhuseli Mtsila.

He said, however, that there was room for improvement.

The review was for the 2017/2018 financial year.

While Moody’s Investors Service lauded the metro’s low debt level, it said it expected debt to rise modestly over the next three years.

This, as the municipality has taken out a loan of R700m to fund infrastructure projects.

“Continued fiscal consolidation has resulted in a robust financial performance and comfortable liquidity that is above the average of rated peers in South Africa,” Moody’s said in its report.

“The city’s credit profile incorporates a capital infrastructure backlog and challenges associated with water shortages due to drought.”

The credit rating from Moody’s is on the same level as that of the City of Cape Town and Ekurhuleni municipality.

Mtsila said he hoped the positive rating would attract new investors to the Bay.

“This rating could not have come at a better time, as the city is under pressure to boost the local economy by attracting foreign investments, build entrepreneurial skills and create jobs,” Mtsila said.

He said the political leadership would focus on improving its systems to ensure plans were implemented.

The first step was advertising the vacancies of critical positions in the municipality, such as that of the chief financial officer, among others.

“Stability in management systems comes as one of the important pillars and priorities of the leadership of the city. ”

DA councillor Retief Odendaal, who was the budget and treasury political head during the period under review, said they were proud of the rating.

“This highlights the progress that has been made by the city under the DA administration when it comes to stabilising its finances.

“We are concerned, however, that with the new administration the positive outlook might change in the near future given some of the utterances of the political leadership in council,” Odendaal said.