Moody’s Credit Rating Agency recently released their credit opinion on the credit profile of the metro.
Moody’s found the credit profile of the City of Ekurhuleni (Baa3/Aaa.za stable) reflects its stable financial performance, supported by a large and diverse economic base, and significant, predictable revenue from service charges and property taxes.
The ratings agency also found the metro’s consistently strong liquidity remains above the average of its rated peers in South Africa (Baa3 stable) and will mitigate its exposure to increasing capital requirements.
“We are highly pleased by Moody’s credit opinion, which has found the city to have a stable financial base.
“This announcement following the recent positive audit outcome by the auditor-general places the City of Ekurhuleni as the prime investment destination in Gauteng and a safe environment for investors.
“We will continue to focus on raising much-needed foreign direct investment to bring the vision of transforming Ekurhuleni into Africa’s first-ever aerotropolis city into fruition,” said Ekurhuleni’s executive mayor, Mzwandile Masina.
In regards to the metro’s ratings outlook, Moody’s said, “The stable rating outlook reflects our expectation that the City of Ekurhuleni will sustain its comparatively strong financial performance and liquidity despite increased capital spending and debt over the next three years.
“The metro’s track record of prudent budgetary management supports the outlook.”
Moody’s has cited the metro’s high capital spending pressure for service delivery as a challenge.
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Commenting on the challenges raised in the credit opinion, Masina said, “This is a reflection of our pro-poor stance as government and the results of the Gauteng City Region Quality of Life Survey 2017/2018 which placed the City of Ekurhuleni as the best metro in terms of services, ahead of Tshwane and Johannesburg.
“We have prioritised service delivery as an urgent daily activity as the city.
“Beyond building a growing economy, we seek to build a well-being economy within our city, which is preoccupied with the livelihoods of our citizens.
“Providing quality healthcare, inclusive human settlement and educating our youth will continue to put pressure on our capital spending, but we are fully aware that this will bear fruit in the near future, as we begin to realise the potential of our demographic dividend.”
