Despite the recent volatile economic climate, the City of Cape Town has managed to retain its double-A credit-rating for the fourth year in a row.
Independent ratings agency, Moody’s International, has again confirmed Cape Town’s Aa2.za rating with a stable outlook in its annual rating review.
Mayoral Committee Member for Finance, Alderman Ian Neilson, says that this is a significant achievement. “This prized rating provides investors and the community with confidence in the financial leadership and management of this municipality.” A strong rating allows for a lower interest rate from banks and other financial institutions, which places the City in a stronger financial position.
The rating places the City amongst the top five metropolitan municipalities. It compares favourably with the other large metros in South Africa in terms of both budgetary performance and management.
Moody’s report describes Cape Town’s financial outlook as ‘stable’, reflecting the expectation that its key financial ratios will remain sound in the medium-term.
Cape Town’s revenue has displayed consistent overall steady growth over the past few years, reflecting an increase in property tax rates and service charges (notably electricity and water tariffs) as well as transfers from National Government to finance capital projects for the 2010 FIFA World Cup™.