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 on the back of the Auditor-General’s (AG) qualified audit report for the City for the 2022/23 financial year, an improvement from the previous adverse audit opinion.
Despite stinging criticism from opposition parties in the council, labelling the AG’s report as “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 long standing problem of water and electricity losses as a result of 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 of Tshwane welcomes the decision by Moody’s Ratings 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 also follows our submission of our audited financial statements to the Johannesburg Stock Exchange. This was further supported by a SENS statement that was issued to the market,” she said.
Also worth noting, she said, was the auditors finding that the City had a credible set of financial statements that would allow creditors to make predictions for the future.
“We believe this is the foundation for potentially improving our credit ratings so that we can access finance at competitive rates to develop infrastructure,” Uys said.
Pretoria News
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