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In-line with Moody\u2019s Ratings lifting its sovereign outlook on the South African Government\u2019s domestic and foreign-currency long-term issuer and senior unsecured ratings from stable to \u2018positive\u2019 last week, Moody\u2019s has also upgraded its ratings outlook for the City of Cape Town to positive.<\/p>\n
The city welcomed the move by the London-based ratings agency on Thursday.<\/p>\n
Read:
Positive move: Moody\u2019s \u2018upgrades\u2019 South Africa\u2019s outlook
Expectations grow for SA credit ratings upgrades<\/p>\n
Moody\u2019s affirmed both South Africa\u2019s and the City of Cape Town\u2019s Ba2 long-term ratings, however, these are still two notched below investment grade or still regarded as \u2018junk status\u2019.<\/p>\n
Following its move on the country\u2019s national outlook, the agency consequently lifted its outlook for the City of Cape Town, and several of SA\u2019s listed banks and major insurers.<\/p>\n
However, there was no change to City of Joburg\u2019s outlook, with Moody\u2019s just last month putting SA\u2019s financial hub on review for possible downgrades from its current Ba3 rating (which is three levels below investment grade).<\/p>\n
\u201cThe City of Cape Town welcomes Moody\u2019s Ratings\u2019 decision to upgrade its outlook from stable to positive, affirming Cape Town\u2019s position as South Africa\u2019s best-run metro and a leader in good governance, financial management and service delivery,\u201d the Mother City said in a statement.<\/p>\n
\u201cMoody\u2019s has recognised Cape Town\u2019s proactive efforts to reduce the impact of national electricity challenges through municipal power procurement, energy diversification and local generation initiatives.<\/p>\n
\u201cAccording to the report, these measures have reduced Cape Town\u2019s exposure to national electricity shortages \u2018relative to the sovereign and most peer metropolitan municipalities\u2019,\u201d it added.<\/p>\n
Read:
Moody\u2019s lifts outlook on SA insurers to positive
CoJ on review for rating downgrades by Moody\u2019s
SA\u2019s increasing fiscal discipline and infrastructure spend<\/p>\n
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Noting that Moody\u2019s has upheld the city\u2019s Ba2 long-term issuer rating, City of Cape Town highlighted the ratings agency\u2019s comments around the city\u2019s \u201cstrong and resilient standalone credit profile\u201d in addition to its \u201csound financial governance\u201d and \u201cprudent financial planning\u201d.<\/p>\n
Cape Town Mayor Geordin Hill-Lewis also hailed the move in a post on X, saying it was the city\u2019s \u201csecond credit ratings upgrade\u201d for the current term of office.<\/p>\n
\u201cWe\u2019ve worked incredibly hard to become South Africa\u2019s leading city and the regional example of good governance. Delivering services more cost effectively with financial transparency brings investment and JOBS to the Mother City.,\u201d he said.<\/p>\n
BREAKING: Cape Town earns another Moody\u2019s Ratings upgrade!<\/p>\n
This is Cape Town\u2019s second credit ratings upgrade during our term of office! We\u2019ve worked incredibly hard to become South Africa\u2019s leading city and the regional example of good governance.<\/p>\n
Delivering services more\u2026 pic.twitter.com\/ap9RRqwDH4<\/p>\n
\u2014 Geordin Hill-Lewis (@geordinhl) May 29, 2026<\/p>\n
\u201cPositive ratings are good for the city as it means it can access loan funding at favourable rates,\u201d commented City of Cape Town\u2019s mayoral committee member for finance, Councillor Siseko Mbandezi, in a statement.<\/p>\n
\u201cThis is especially important as the city continues to roll out its record R40 billion infrastructure plan,\u201d he added.<\/p>\n
\u201cThis positive outlook from Moody\u2019s is a strong vote of confidence in Cape Town\u2019s governance and resilience.<\/p>\n
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\u201cWhile many metros are under severe financial and service delivery pressure, this \u2018City of Hope\u2019 continues to manage public finances responsibly, invest in critical infrastructure, and work proactively to protect residents and the local economy from national risks,\u2019 said Mbandezi.<\/p>\n
According to the City of Cape Town, Moody\u2019s noted that the metro continues to demonstrate a \u201cconsistently robust operating performance\u201d. This, it said, is supported by exceptionally high revenue collection rates of around 98%, strong cash reserves, low debt levels, and a diversified local economy driven by sectors such as tourism, logistics and services.<\/p>\n
\u201cThe agency also highlighted the city\u2019s strong liquidity position, prudent debt management and transparent financial reporting as key strengths that continue to distinguish Cape Town from other metros in South Africa.\u201d<\/p>\n
Listen\/read:
Mr Mayor, in what city do you live in?
Cape Town widens household relief as court ruling forces tariff rethink
Joburg\u2019s R97bn budget: Higher tariffs amid intensified revenue drive<\/p>\n
Outlook on banks\u00a0<\/p>\n
Moody\u2019s also changed its outlook on the long-term deposit ratings of five South African banks from stable to positive.<\/p>\n
Absa, Investec, FirstRand, Nedbank and Standard Bank saw an improvement in their senior unsecured and issuer ratings, reflecting \u201can improvement in the operating environment\u201d in South Africa.<\/p>\n
According to the agency, its decision to affirm the banks\u2019 ratings is supported by their earnings-generating capacity, as well as their liquidity and capital buffers.<\/p>\n
Read: Big banks shoulder R90bn of SA tax burden<\/p>\n