'Downgrading of Ekurhuleni and Tshwane not helpful,' says economist Pheko
Two of SA’s biggest metros, Tshwane and Ekurhuleni, have been pushed further into junk status by ratings agency Moody’s Investors Service, as the cities’ financial situations deteriorate as a result of COVID-19.
Moody’s downgraded the two Gauteng metros on Wednesday. The province contributes more than a third of the country’s GDP. While the country’s economic situation was precarious before the Covid-19 lockdown, it worsened over the past few months and has specifically affected revenue collection in municipalities.
John Perlman on Afternoon Drive speaks to Lebogang Pheko, senior research fellow and political economist at Trade Collective, for more.
At the time when many municipalities are going to battle, this is really problematic. When we look at the municipality, they look at the constraints and debt levels. Ekurhuleni has done their best trying to deal with potholes, it's a huge city and I don't think this is a helpful rating.Lebogang Pheko, Senior research fellow and political economist - Trade Collective
This means you have less to spend. They could increase municipal rates, which is very unpopular. They could just go and borrow and cut back on basic infrastructural development.Lebogang Pheko, Senior research fellow and political economist - Trade Collective
Listen below for the full interview...
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