Finances Across the Major Metropolitan Municipalities Appear to be Holding Firm but Not All are Benefitting
07 October 2021 – GCR Ratings (“GCR”) has published a Credit Research report that provides an overview of the current financial health of the large metropolitan municipalities, based on the quarterly reporting.
Contrary to market perceptions, the COVID-19 disruptions have not had a uniform negative impact on the financial health of metropolitan municipalities, with major metropolitan municipalities reporting stronger liquidity at financial year-end 2020/21.
Strengthening liquidity appears to be driven by improved collections, with capex implementation and creditor payments broadly in line with previous years’ performance, particularly after accounting for the increased implementation challenges.
The cash position at Johannesburg, Cape Town and eThekwini has recovered such that GCR recently affirmed the rating for Johannesburg, whilst placing eThekwini on Positive Outlook. The rating for Buffalo City was also affirmed.
Tshwane’s rating was significantly downgraded as COVID-19 exacerbated underlying challenges.
GCR will periodically provide insights on key sectors/industries across different territories in which various rated entities are domiciled, encompassing changes in the operating environment, performance trends and its view of the impact of an evolution in market dynamics on the credit risk profiles of rated entities in selected industries.
Sector Head: Corporate & Public Sector
+27 11 784 1771
Related Criteria and Research
Criteria for the GCR Ratings Framework, May 2019
Criteria for Rating Local and Regional Governments, May 2019
GCR Ratings Scales, Symbols & Definitions, May 2019
GCR Country Risk Scores, October 2021
Rating announcements and reports for the GCR rated municipalities
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.
These cookies are necessary for the website to function and cannot be switched off in our systems. They are normally set in response to actions made by you, amounting to a request for services, such as setting your privacy preferences, logging-in or completing forms. You can set your browser to block or alert you about these cookies, but please note that parts of the website may no longer function correctly. Note: These cookies do not store any personally identifiable information.
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors navigate the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies, the site will not be performance optimised for your use.