The financial credibility of the City of Johannesburg has come under renewed scrutiny after the Global Credit Rating (GCR) Company downgraded its outlook, citing material uncertainty linked to delays in the city’s audit process and the continued failure to publish audited financial statements.
The downgrade comes amid mounting pressure on Africa’s economic hub, which has already faced a procedural suspension of its listed debt securities by the Johannesburg Stock Exchange (JSE) earlier this month due to outstanding financial reporting requirements.
The developments have triggered a sharp political response from ActionSA, which says the situation reflects a deepening governance failure that could have far-reaching consequences for residents and the broader economy.
ActionSA president and Johannesburg mayoral candidate Herman Mashaba said the downgrade signals systemic collapse in financial accountability and warned that residents are likely to bear the consequences through worsening service delivery.
“Joburg is Africa’s economic giant. It possesses the largest budget of any municipality in South Africa, at R90-billion in the current financial year. Should the city’s finances implode, it’ll cascade throughout the rest of the country. Residents simply cannot afford a governance and financial management crisis of this magnitude.”
Mashaba said the downgrade reflects what he described as long-standing administrative failure and a breakdown in fiscal discipline.
“Now more than ever, residents should hold its leaders accountable for their failure to adhere to regulatory obligations and uphold fiscal discipline. Residents are grappling with poor service delivery, infrastructure backlogs, and economic strain. This downgrade undermines investor confidence and erodes public trust in the city’s leadership and administrative systems.”
He added that the current trajectory points to continued deterioration in service delivery and governance stability if urgent corrective action is not taken.
He reiterated that this would never happen under an ActionSA-led municipality.
In response, the City of Johannesburg rejected claims that the downgrade reflects financial distress, insisting instead that the matter relates to compliance timelines and audit finalisation processes.
The city said the JSE suspension of its debt securities is a procedural outcome linked to the timing of its audited financial statement submission and not an indication of instability.
It stated that the audit process is at an advanced stage and is being finalised in collaboration with the Auditor-General of South Africa through established protocols.
“The city wishes to emphasise that this is a technical compliance matter related to reporting timelines, not an indication of financial distress or instability.”
The municipality added that it remains financially operational and continues to meet all debt servicing and financial obligations without disruption, while maintaining that service delivery to residents has not been affected.
It further said it is engaging with regulatory bodies, including the JSE, and remains confident that the matter will be resolved once audited financial statements are finalised and submitted within the current reporting cycle.
“The city has prioritised the integrity and accuracy of its financial reporting processes to ensure full compliance with regulatory standards.”
It added that the process reflects its commitment to transparent and accountable governance and said further updates will be communicated as milestones are reached.
At this stage, neither the GCR nor the city has indicated when the final audited financial statements will be publicly released.
The Star
masabata.mkwananzi@inl.co.za