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Joburg’s Resilience Shines Through Despite GCR Rating Downgrade



Joburg's Resilience Shines Through Despite GCR Rating Downgrade

The City of Johannesburg remains resilient despite economic pressures and a recent downgrade by Global Credit Rating Company Limited (“GCR”). Finance MMC, Dada Morero, asserts that the City continues implementing its capital expenditure program and fulfilling all debt obligations, even in a deteriorating global economic climate as reported by Joburg Newsroom.

The downgrade from A+ (za) to A (za) was prompted by challenging macroeconomic conditions, including subdued income growth, rising expenditures, and weak collection rates. Residents and commercial property owners face affordability pressures due to inflation, interest rate hikes, load shedding, and increasing unemployment and poverty levels.

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The City acknowledges its credit protection metrics have weakened, primarily due to sustained Unauthorised, Irregular, Fruitless, and Wasteful Expenditure (UIFWE) in its Management and Governance (M&G) profile. However, the City is actively implementing a UIFW reduction strategy to address this issue.

Despite the challenges, Johannesburg displays remarkable financial fortitude, maintaining consistent surpluses, robust cash reserves, and stable debt ratios. The City remains committed to prudent fiscal management, focusing on optimising expenditure, revenue management, operational efficiencies, and maintaining a sustainable balance sheet with effective internal controls.


The rating shift from A+ to A positions the City as a high-quality issuer relative to others in the country. Johannesburg’s ability to service debt and manage default risk is robust, with no defaults reported on obligations. Liquidity management is a key focus during tough global economic periods when customers struggle to pay due to high-interest rates and unemployment.

The City acknowledges the need for continuous improvement in fiscal management, governance, and compliance while remaining dedicated to fortifying its financial position and investing in development. Johannesburg aims to safeguard financial sustainability and self-funding capabilities, especially amid challenging economic times and potential decreased allocations from the national fiscus.

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Photo: Facebook / @Dada Morero

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