Moody's rates 10 South African municipalities

Moody's Investors Service said it assigned first-time ratings to 10 municipalities in South Africa, representing the launch of the agency's municipalities service on the country.

The ratings are as follows: Amathole District Municipality, A3.za; Buffalo City Municipality, A1.za; City of Cape Town, Aa2.za; Ekurhuleni Metropolitan Municipality, Aa2.za; Greater Tzaneen Municipality, Baa2.za; KwaDukuza Municipality, A3.za; Municipality of Makana, Baa2.za; Municipality of Westonaria, Baa2.za; Nelson Mandela Bay Metropolitan Municipality, Aa3.za; and uMngeni Municipality, Baa2.za.

The agency said the ratings assigned acknowledge the sound institutional framework and legislation that governs the municipal sector in South Africa.

However, most of the challenges facing the municipalities are common to all, Moody's said: infrastructure backlogs exist in the townships, maintenance of existing assets is inadequate, capacity and skills shortages are common and the collection of municipal taxes and levies are in some cases below 90%, which adversely affects service delivery.

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