On June 9, Moody’s downgraded SA’s rating to Baa3 from Baa2, and assigned a negative outlook. The rating actions concluded the review for downgrade that started on April 3. On Monday, Moody’s provided the following frequently asked questions (FAQ) — and their answers — on its ratings decision. Q: Has your view on the strength of SA’s institutions changed over the last few years? A: SA’s institutional framework has weakened progressively over several years, but the deterioration has become more apparent in recent months with infighting in the run up to ANC elections in 2017, that culminated with the March Cabinet reshuffle. The institutional weakening has manifested itself in systemic corruption, which has been widely discussed in SA’s public debate. SA has experienced excessive reliance on the court system and risks judicial overreach, where the judicial branch of the government is often approached to compensate for the gaps in functioning of the other government branches. This grad...
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