Fin24

Gautengers to feel Moody's bite

2012-10-03 12:40

Johannesburg - Residents and business would be hit the hardest by the downgrade in credit ratings of three metropolitan areas in Gauteng, the Democratic Alliance said on Wednesday.

"The downgrading of South Africa's national credit rating due to economic and political uncertainty undoubtedly had a knock-on effect on the credit outlook," DA spokesperson Mike Moriarty said in a statement.

"The financial crises and absence of proper financial accountability in these municipalities undeniably worsened the situation. It would be wrong of the Gauteng finance department to ignore some fundamental problems."

Moriarty said the credit outlook for the Tshwane, Johannesburg and Ekurhuleni metros were most affected. These were the three metropolitans that were downgraded.

On Monday, Moody's Investor Services downgraded several municipalities, following its downgrade of South African sovereign debt.

Moriarty said the weakness in financial management was illustrated by a number of factors, including the billing crisis in Johannesburg and Tshwane, and difficulties experienced in raising loans in Tshwane.

"A deterioration of the audit assessments by the Auditor-General, including the qualified opinion issued in respect of Johannesburg, [arise from] corruption scandals such as the Miss World fiasco..."

He said that the poorest of the poor and the most vulnerable people in Gauteng would be affected the worst.

"The unfortunate reality is that residents and businesses will be [the] worst affected by the inability of these municipalities to ensure sound financial management, as securing credit will become more difficult and the cost of rendering basic services will increase."

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Comments
  • freddy.vanwijk - 2012-10-03 12:53

    Well, Moody's has just been downgraded to CCC-. Enjoy this Moody's.

  • leonard.rom.7 - 2012-10-03 13:33

    WHAT A JOKE TIME FOR CHANGE ENOUGH IS ENOUGH

      dhavandran.palavar - 2012-10-03 14:02

      viva da

  • dhavandran.palavar - 2012-10-03 14:02

    'Moriarty said the weakness in financial management was illustrated by a number of factors, including the billing crisis in Johannesburg and Tshwane, and difficulties experienced in raising loans in Tshwane.' what financial management?

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