The City of Johannesburg’s recently upgraded credit ratings from ratings agencies Moody’s and Fitch will hang in the balance when the coalition council debates its five-year budget for the next financial year, former mayor Parks Tau has warned.
Last year United States-based rating agency Moody’s raised the city’s status to Baa2 and Aa1, which means high quality and low credit risk.
“On the basis of the previous budgets and the current one in place, that we passed, there isn’t any immediate risk to the credit ratings.
“[As for the next budget] it will be difficult … There has to be a lot of bargaining among all the parties to ensure that you get a budget that continues to maintain high levels of spending, because … Jo’burg has been renowned for raising loans and instruments in the debt capital markets to drive capital investment programme,” Tau told the Mail & Guardian.
He said political parties should tread carefully during the budget debate and the subsequent vote, adding that this time the ANC would wait for the coalition partners to lobby its councillors for their support.
“I’m sure it’s going to be an interesting experience for everybody.