Fitch warns it could review ratings after Cabinet reshuffle
Axing Gordhan increases the likelihood of a downgrade due to ‘continued political instability'
Credit rating agency Fitch warned on Friday that the axing of Finance Minister Pravin Gordhan has increased the likelihood that the government’s sovereign credit rating will take a knock. In a statement, Fitch said the Cabinet reshuffle signalled a change in policy direction and would raise political tensions, potentially weakening public finances and standards of governance. Fitch also flagged the potential risk to fiscal consolidation as a concern and that the transparency and governance of state-owned enterprises (SOEs) would be halted. “Continued political instability that adversely affects standards of governance, the economy or public finances, was one of the ratings sensitivities we highlighted in November when we revised the outlook on SA’s BBB-rating to negative from stable.” Fitch said the reshuffle could affect the GDP and increase contingent liabilities. “These developments, together with relevant policy announcements from the new Cabinet, could result in Fitch reviewing...
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