Business

Moody’s Gives Johannesburg a Surprise Vote of Confidence Amid Economic Struggles

Published

3 hours ago

October 27, 2025

Chiraag

Johannesburg skyline, Moody’s rating report, South African economy 2025, Enoch Godongwana, G20 Summit Johannesburg, city finances review, local government, Joburg ETC

Against the Odds, Joburg Gets a Nod

Johannesburg, South Africa’s financial heartbeat and, lately, its most embattled city, has received a rare show of confidence. Credit ratings agency Moody’s has given the City of Johannesburg a positive financial assessment, even as it faces collapsing infrastructure, political infighting, and mounting public frustration.

According to Moody’s analysts, the city’s finances still reflect “sound operating performance, moderate debt levels, and a large, diversified local economy.” That’s despite warnings from the national government and business leaders that the city’s governance is on the brink of crisis.

The review, conducted in September, highlighted Johannesburg’s ability to maintain positive operating margins and manage its budget closely. For Moody’s, this reflects a city that, while battered, still functions on the strength of its economic base.

A City Under Pressure

It’s no secret that Johannesburg is struggling. Home to over five million residents and contributing roughly 16% of South Africa’s GDP, the city has been plagued by rolling power cuts, burst pipes, and crumbling roads. Council reports last year revealed that Johannesburg was R221 billion behind on infrastructure maintenance and upgrades for essential services like water, power, and transport.

The crisis is so dire that in August, Finance Minister Enoch Godongwana demanded an explanation for R24.4 billion in unauthorised, irregular, and wasteful expenditure. He warned that the national government might cut funding unless the city accounted for the money.

This has placed Joburg in the crosshairs of both the public and the private sectors. Business leaders have already begun discussions with the government about how to rescue the city from further decline, especially with Johannesburg preparing to host world leaders for the G20 Summit next month.

Political Turbulence Meets Economic Fragility

Johannesburg’s financial challenges are deeply intertwined with its political ones. The city is currently governed by a coalition led by the African National Congress (ANC), whose internal divisions have been blamed for much of the recent instability.

The opposition Democratic Alliance (DA), which previously governed the city, has positioned Joburg’s deterioration as proof that coalition politics can’t work under current conditions. With local government elections coming next year, the DA is hoping to reclaim the city by capitalising on the public’s frustration.

Why Moody’s Still Sees Hope

Despite the dysfunction, Moody’s believes Johannesburg’s financial structure remains intact. The agency noted that the city continues to maintain a stable long-term credit rating of Ba3, three notches below investment grade but still one of the strongest among South African municipalities, second only to Cape Town, which sits at Ba2, on par with the national government.

Moody’s credited this to prudent financial management and a diversified local economy anchored by sectors like finance, mining, construction, and trade. In simpler terms, Joburg’s size and economic depth still give it the muscle to weather crises that might sink smaller municipalities.

The Bigger Picture

Moody’s confidence in Johannesburg may not erase the city’s troubles, but it serves as a reminder of its resilience. Even amid dysfunction and decay, Joburg remains South Africa’s beating economic heart, home to the Johannesburg Stock Exchange (JSE) and most of the nation’s top companies.

For residents, the assessment offers little immediate relief from potholes or outages. Yet it signals that international investors still believe in the city’s long-term potential.

As Johannesburg readies itself for the spotlight of the G20 Summit, Moody’s report stands as both an endorsement and a warning: the world is watching, and South Africa’s financial capital can no longer afford to fall apart.