EDITORIAL: Pressing on

We may not love what the global ratings agencies have to say about us but it is always worth heeding their views, in part because their methodology requires them to compare countries with their peers.

The latest report from Fitch indicates SA does not compare well — even though the ratings agency is now giving the country credit for “fewer blackouts” and is factoring in the positive impact this will have on SA’s ability to grow.

Fitch flags a series of supply-side constraints that have damaged productivity in the years since the global financial crisis. High unemployment and weak investment have weighed on productivity growth, which has been consistently negative, making SA a standout globally — and not in a good way. Fitch points to poor education, wide inequality and insufficient transport infrastructure.

On the upside, it sees the relief from load-shedding as grounds for optimism, and now forecasts SA’s potential growth rate lifting to 1%. That is better than in the recent past but still far worse than other emerging markets.

All of which keeps SA in junk status for now. We have no-one to blame but ourselves. But the clear signal from the ratings agencies and the markets is that reforms will be rewarded. We just have to push ahead.