Moody’s gives city boost with improved rating

THE City of Tshwane is basking in glory after it received an improved outlook from negative to stable from Moody's ratings agency.

The rating comes after the auditor-general's qualified audit report for the City for the 2022/23, an improvement from the previous adverse audit.

Despite stinging criticism from opposition parties in the council, labelling the AG's report “shameful” the City's executive believed it was a feather in the cap of the municipality.

The report had raised concerns about the City's longstanding water and electricity losses due to illegal connections. But Tshwane MMC for finance, Jacqui Uys, said the stable outlook rating coupled with the 2023 qualified audit report reflected a step in the right direction for the City.

The latest development, according to Uys, served as evidence that the City's turnaround plans were starting to bear fruit. She said: “The City welcomes the decision by Moody's to retain our ratings status and upgrade our outlook from negative to stable. This follows a notice to review our rating and possibly put the City on a further downgrade in March 2024.”

Moody's, she said, confirmed the City's Caa2 long-term issuer rating and its Caa2 BCA and its Caa1.za NSR long-term issuer rating.

“This is a positive development that will assist the City as we work to stabilise our finances,” Uys said.

She said the City was working to rebuild its tax administration to achieve further upgrades, which would enable it to borrow capital funding for infrastructure projects.

“Moody's ascribes the City's stable outlook rating as a reflection of the City's decreased risk of debt acceleration. The rating follows submission of audited financial statements to the JSE,” Uys said.