Johannesburg, South Africa\u2019s richest city and economic hub, received a vote of confidence from Moody\u2019s Ratings despite a record of political dysfunction and wasted spending that\u2019s prompted the national government to threaten to withdraw funding.<\/p>\n\n\n\n
The city\u2019s credit ratings reflect \u201cits sound operating performance, moderate debt levels, and a large, diversified local economy, supported by prudent financial management and close monitoring of budget execution and cash flow,\u201d Moody\u2019s analysts Irena Krizkovska and Marie Diron wrote after a review of the city\u2019s finances conducted last month.<\/p>\n\n\n\n
\u201cOver the years, the city has consistently maintained positive operating margins and moderate-to-low liquidity ratios,\u201d the analysts said, while acknowledging that Johannesburg faces pressures from infrastructure backlogs and a growing population that have led to rising debt levels. <\/p>\n\n\n\n
The Moody\u2019s assessment \u2014 which didn\u2019t constitute a rating action \u2014 seems at odds with the view of South Africa\u2019s national government and business leaders. <\/p>\n\n\n\n
In August, Finance Minister Enoch Godongwana\u00a0demanded<\/a>\u00a0an explanation for R24.4 billion of \u201cunauthorised, irregular, fruitless and wasteful expenditure,\u201d and warned the city risks losing government funding unless the money is recouped.<\/p>\n\n\n\n And in September, business leaders said they\u2019ve been discussing with the government whether they can help\u00a0rescue<\/a>\u00a0Johannesburg from decay. <\/p>\n\n\n\n