DA welcomes Stable investment outlook for Ekurhuleni; applauds efforts of the Multi-Party Coalition

by Cllr. Brandon Pretorius — DA Deputy Chief Whip in Ekurhuleni

Date: 22 April 2022

Release: Immediate

Type: Media statement

The Democratic Alliance (DA) in Ekurhuleni welcomes the announcement by GCR Credit Ratings agency, to issue the City’s investment outlook to Stable. This is in large part a result of the improved financial position, as well as the passing of the Adjustment Budget in February 2022, which has ushered in the beginning phases of good financial stability to the Metro.

Credit Ratings agencies, such as GCR, provide important advisory services on the viability and attractiveness for investment based on the financial health and situation of an entity. GCR’s assignment of Stable to the City’s outlook should thereby be welcomed and is a testament to the governing Multi-Party Coalition’s commitment to financial prudence and stability of the City’s finances.

Importantly, a Stable credit rating outlook could potentially be a precursor for increased investment in the City, resulting in an improved environment to do business and ultimately aid positively in job creation. In addition, the borrowing costs of the City will decrease as institutional lenders view the City as less of a risk in terms of repayments. This will improve the City’s liquidity and thereby increase its ability to provide much-needed services for Ekurhuleni’s residents.

This is a welcome turnaround after the Metro, was downgraded by Moodys Rating Agency to Negative in July 2021 on the back of downside risks related to the City’s liquidity position, and weak operating performance. This was exacerbated by the socio-economic impact of the Covid-19 pandemic.

Given the current political and economic context, the DA applauds the Multi-Party Coalition’s efforts in securing this favourable investment outlook. Salvaging the dire position that the ANC and their coalition partners left the City’s finances in the previous administration, has posed major challenges for the Multi-Party Coalition, but this latest investment rating provides evidence that the back to basics approach is paying dividends which will ultimately improve the City’s ability to provide services to its residents.

Cllr. Brandon Pretorius

DA Deputy Chief Whip in Ekurhuleni