Standard and Poor’s Global Ratings may have disappointed South Africa for it has kept country’s foreign- and local-currency credit ratings in “junk” territory. But all that is not lost for the country since the S&P has given a stable outlook with a caveat that the new government should focus on reforms to revive the economy. Though newly elected President Cyril Ramaphosa swears on carrying out the reforms and fixing the loss making state firms, it may take a while in luring back the foreign investors who have moved out of the country triggered by rampant corruption and policy instability. The new president can take umbrage under the plea the mass scale exit of foreign investors had happened during his predecessor’s-Jacob Zuma’s- time. At the same time, he will need a greater degree of cajoling to bring back the investors who threw their hands in despair. S&P pegged long-term foreign-currency rating at ‘BB’, while the long-term local-currency rating was kept at ‘BB+’ indicating a stable outlook for both. That augurs well for the country since the expectation was that the ratings on these counts also would go down. Fitch Ratings also do not give thumps up to debt portfolios. It has assessed Pretoria’s debt as junk. However, among the top three rating agencies, Moody’s classifies the sovereign debt as investment-grade. Explaining the rationale of according stable rating to the debt, Moody says since the elections are over, the South African government is expected to pursue some reforms and attempt to improve economic growth and rein in fiscal deficits. Ramaphosa, who was sworn in as president on last Saturday vouched to create more jobs and tackle deep-rooted corruption that has strangled economic growth.
