By Nangamso Mabindla
A RECENT credit rating report on Buffalo City's finances has confirmed that the City has a strong capacity to repay long-term liabilities and short-term debt.
According to the report, compiled by a Johannesburg rating agency that looks at Risk Analysis CA-Ratings, the City's healthy finances are the result of strong economic growth in the automotive industry, the largest contributor to the City's gross domestic product. The textile, clothing and leather industries have also played a leading role in the city's economy, as has the Port of East London, one of the country's major vehicle import and export facilities.
Brian Shepherd, Buffalo City's chief financial officer, said the report would have a positive effect on the city's ability to generate external funding. "The credit rating report is an essential document to external funding providers, like banking institutions, governments and donors, to measure the financial health and strength of Buffalo City Municipality."
Shepherd said the city's healthy financial status would give funders the confidence to provide grants and loans to the municipality as they now knew the City was able to repay the cash and manage the money correctly.
This is the first time the rating agency has assessed Buffalo City. It has been operating since 1993, and has already compiled credit reports on 15 other municipalities, including Tshwane, Johannesburg, Ekurhuleni, and the Nelson Mandela and District Municipalities, as well as Category C municipalities like Cacadu District and Makana.
Source: Buffalo City
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