Two of the world’s major ratings agencies, Moody’s and S&P Global Ratings, will release their credit ratings reviews of SA shortly. The third one, Fitch Ratings, is expected to release its soon, although no date has been given. The Conversation Africa’s Charles Leonard asked Mampho Modise, a postgraduate researcher at the University of Pretoria, to explain the significance of the credit reviews. What do the agencies look at in the process of reviewing a country? In their rating methodologies, rating agencies have developed rating criteria for assessing the performance of key macroeconomic and socioeconomic indicators. By assessing the indicators, the rating agencies are able to determine the borrower’s ability and willingness to honour debt obligations. Rating criteria focus on the following components and indicators: • Economic structure and performance: Real GDP, per capita income, headline inflation rate, gross investment as a percentage of GDP and gross domestic savings as a per...
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