S&P: no rating actions are currently warranted

Ramaphosa needs time to improve economic growth and stabilise public finances, says S&P.

Standard & Poor’s (S&P) has said that South Africa’s new leadership in the form of recently appointed President Cyril Ramaphosa could bring confidence and faster implementation of key reforms already undertaken.

However, the ratings agency said, Ramaphosa and his administration will require time to design and implement measures to improve economic growth and stabilise public finances, given the structural and institutional challenges that South Africa faces.

S&P said in a statement:

“Economic growth remains low, impeding the path to fiscal consolidation. We think the government will attempt to introduce offsetting measures in an effort to improve budgetary outcomes, but these may not be sufficient to stabilise public finances in the near term. We have determined, based solely on the developments described herein, that no rating actions are currently warranted.”

S&P was one of two ratings agencies to cut South Africa’s debt to junk in 2017, following Zuma’s unexpected firing of Pravin Gordhan as his finance minister.