By Lehlohonolo Lehana.
Rating agency, Global Credit Rating (GCR), has revised the City of Johannesburg (COJ) rating outlook from stable to “rating watch negative”, due to its failure to finalise its audited financial statements.
The GCR cites material uncertainty in the city’s audit process, after failing to publish its annual financial statements.
GCR is wholly owned by the global credit rating agency Moody’s, which makes its outlook important for investors looking to invest in Joburg’s debt.
Earlier this month, the Johannesburg Stock Exchange (JSE) suspended the city from trading over delays in releasing its financial results, which also prevents it from issuing new debt.
On 10 April 2026, the city notified bondholders via the JSE’s stock exchange news service that GCR has downgraded its credit rating outlook to negative from stable.
The change in outlook to negative means that, as things stand, the next move in Joburg’s credit rating from GCR is likely to be a downgrade.
A downgrade in the city’s credit rating will impact its access to financing on the JSE and result in it having to pay a higher interest rate to investors to hold its debt, increasing the cost of borrowing.
This will further squeeze the city’s finances, with more money having to be directed to debt-servicing costs and not towards service delivery.
“Bondholders are hereby advised that the credit rating agency, GCR, has placed the city’s national scale long-term and short-term issuer rating on Rating Watch Negative, having revised the rating outlook from stable,” the city said.
“GCR has indicated that the Rating Watch Negative on the city is due to material uncertainty in the audit process, as highlighted by the continued delay in finalising the annual financial statements for the year ended 30 June 2025.”
The city said its financial statements are being finalised and are expected to be released by no later than 31 May 2026.
“The city is currently finalising its audit with the Auditor-General of South Africa, including resolving technical accounting matters through a standard dispute resolution process.”
The city explained that this is a technical issue that does not indicate it is in financial distress or cannot pay back its debts.
It also said its service delivery is not affected by the suspension, as it can fund its operations through revenue collection.
“The City has a strong track record, having redeemed R9.9 billion in bonds (COJ01–COJ07 and COJG01). Only R1.44 billion (COJ08) remains, scheduled for redemption on 22 June 2026,” it said.
“This process is about ensuring accuracy, compliance, and transparency in audited financial statements – not financial instability.”
The City of Johannesburg has the largest budget of any municipality in South Africa, with it set to spend over R90 billion in the current financial year.