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City of Johannesburg receives rating downgrade
The City of Johannesburg's credit rating has been downgraded, from A plus to A.
JOHANNESBURG - The City of Johannesburg's credit rating has been downgraded, from A plus to A.
GCR Ratings, an affiliate of Moody’s Investors Service, has also revised its outlook from stable to negative.
It means the city will struggle to pay back its loans and there will be a higher cost involved for future loans.
Persistent service delivery backlogs, load-shedding and political dysfunction was also cited by GCR.
Residents and commercial property owners, are struggling to pay their bills due to what they call, an increasing inflationary and interest rate environment.
This resulted in a decrease in collections of two and a half percent, and more and more debtors.
In terms of the negative outlook, GCR's opinion is that there are significant risks to the City's turnaround plans - including political instability and the unlikelihood that collections will improve in the current economic environment.