GCR Ratings, a subsidiary of global credit agency Moody’s, has cut the City of Johannesburg’s credit outlook from stable to negative. The city notified bondholders via the JSE on Thursday.
The downgrade reflects what GCR called “material uncertainty” in Johannesburg’s financial position. The city has not yet published its annual financial statements for the year ending 30 June 2025.
Why it matters
A negative outlook means the next move is likely a full downgrade. That would increase the interest rate Johannesburg must pay on its debt, pushing more money toward debt servicing and away from roads, water and electricity. South Africa’s economic capital is already struggling to deliver basic services to its 6 million residents.
The numbers
Between July and December 2025, Johannesburg billed R37.2 billion for rates, water, electricity and refuse removal. It collected R31.9 billion, a shortfall of R5.3 billion.
Over the past decade, analysts say the city has shifted spending from infrastructure investment to consumption, primarily salaries. Leadership instability at the municipality has compounded the problem, with multiple changes in the mayoral position undermining long-term planning.
Borrowing at risk
Johannesburg relies on the bond market to fund infrastructure projects. A credit downgrade would make that borrowing more expensive, creating a cycle in which the city has less money for the infrastructure that generates the revenue it needs to service its debt.
The city has not publicly responded to the outlook change. Council is expected to address the matter in its next scheduled sitting.