National Treasury. File photo
Government will engage ratings agency S&P Global on their areas of concern, while taking steps to restore South Africa’s investment grade credit rating – a top priority – the National Treasury said.
“Government notes S&P’s decision to affirm South Africa’s long-term foreign and local currency debt ratings at ‘BB’ and ‘BB+’ respectively, and to maintain the stable outlook,” Treasury said in a statement.
According to S&P, the rating affirmation was underpinned by the following drivers:
Treasury said the stable outlook reflected S&P’s view that “economic growth will pick up modestly over the next year, while government debt will remain above 50 percent of GDP. The outlook also reflects government commitment to pursue economic and social reforms.”
According to S&P, “the ratings are supported by the country’s monetary flexibility, large domestic financial sector, and deep capital markets, alongside moderate external debt, with very low levels of external debt denominated in foreign currency”.
Treasury said government noted S&P’s assessment of challenges and opportunities the country faced in the immediate to long-term and was determined to achieve improved ratings in the period ahead.
Since the elective conference of the governing African National Congress in December 2017, both business and consumer confidence had improved. The February 2018 budget further supported the improved investment climate in the country.
In support of inclusive growth, underpinned by the National Development Plan (NDP), the following progress, among other things, had been achieved thus far:
“Going forward, government will engage S&P on their areas of concern. Taking steps to improve business confidence even further, achieving higher economic growth, fast-tracking the SoC [state-owned companies] reform agenda, and ultimately restoring the country’s investment grade credit rating remains a top priority.
“In pursuit of this agenda, government will enhance its collaboration with business, labour, and civil society in positioning South Africa as an attractive investment destination while also creating an enabling policy environment for inclusive economic growth,” National Treasury said.
– African News Agency (ANA)
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