How SA can earn a ratings upgrade
Though it acknowledges political change, S&P wants to see a significant, sustained improvement in economic growth and public finances before upgrading the country from its present junk status
S&P Global Ratings has taken a dispassionate look at the improved landscape under president Cyril Ramaphosa but found the green shoots of renewal too weak to justify an upgrade to SA’s credit ratings outlook.In contrast to Moody’s upbeat review in March, S&P’s assessment delivered over the weekend strikes a sceptical note. It has kept all SA’s credit ratings at a subinvestment (junk) grade and held the outlook as "stable", emphasising the "increased" fiscal risks and "considerable" socioeconomic challenges the country faces.In March, Moody’s changed the outlook on SA’s investment-grade ratings from "stable" to "positive", saying it saw scope for SA to enter a virtuous cycle of economic growth, fiscal prudence and mounting social cohesion.S&P’s assessment coincided with the end of Ramaphosa’s first 100 days in office. As a review of SA’s creditworthiness compared to the position on November 24 2017, it provides an important perspective of the effect of Ramaphosa’s election on the cou...
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