S&P downgrades South Africa to junk after Zuma’s Cabinet shuffle
S&P Global Ratings lowered South Africa's sovereign credit rating on Monday to a subinvestment grade of BB+, from BBB-, on political and institutional uncertainty. It has also sustained its “negative outlook” on the country.
The downgrade was in direct response President Jacob Zuma’s Cabinet shuffle, which took place at midnight on March 31. The ratings agency said the executive changes “have put at risk fiscal and growth outcomes”.
"The downgrade reflects our view that the divisions in the ANC-led government that have led to changes in the executive leadership, including the Finance Minister, have put policy continuity at risk," S&P said in a statement.
During the shuffle, Zuma replaced the highly respected Pravin Gordhan with Malusi Gigaba, who was previously Home Affairs Minister.
The negative outlook, meanwhile, reflected a view that political risks would remain elevated in 2017 and that policy shifts were likely.
The agency saw higher risks of Budgetary slippage, and upward pressure on South Africa's cost of capital, which would further dampen already-modest growth.
Also reassessed was South Africa's contingent liabilities, reflecting an increased risk that nonfinancial public enterprises, such as Eskom, would need further “extraordinary government support”.
S&P Global Ratings lowered the long-term South Africa national scale rating to 'zaAA-' from 'zaAAA'.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation