City of Joburg explains how delayed audit led to ratings downgrade watch

Rating agency Moody's has put the beleagured City of Johannesburg on a credit downgrade watch.

Its chief concern was the JSE's suspension of the City's bonds on 27 March for failing to publish its financial statements for the year to end-June 2025 within the period set down under its debt listing requirements.

Joburg has a credit rating of Ba3, which is three notches below investment grade or so-called junk status.

Stephen Grootes talks to Tshepo Makola, Chief Operations Officer at the City of Johannesburg, to clarify what led to the bourse suspension and subsequent ratings watch.

The delay in completing the audit process was due to a dispute with the Attorney-General (AG), Makola says.

"Our financials were ready and submitted... but we had a dispute on a number of matters the AG had raised and how we were basically cooperating through the audit... It took the AG a while then to complet the audit because we raised a few issues as well, which we had to escalate to level 1 and 2 tier."

Makola says that, already before the audit started, the AGs negative comments in Parliament about the City indicated the tone of their interaction.

"The AG said Johannesburg doesn't have the financial capacity or skills, and from there already you could have seen the audit was going to be a bit difficult."

All outstanding issues have now been resolved, Makola adds.

"We've agreed with the JSE that by end of May the audited financials will b submitted and then they will lift the suspension, and then Moody's would react to that."

The rating agency has also confirmed that the City met the 31 August 2025 deadline for providing its financial statements to the AG and expects to finalise its audited statements by 31 May 2026.

Scroll up to the audio player to listen to the full interview with the COO of the City of Johannesburg