The National Treasury on Monday welcomed capital market agency Rating and Investment Information’s (R&I’s) decision to affirm South Africa’s long-term foreign currency debt rating at BBB and its local currency debt rating at BBB+.
R&I also revised the outlook from negative to stable.
The action notably confirms the sovereign as an investment grade credit, said the National Treasury.
According to R&I, the ratings affirmation reflects improved growth performance and prospects; announced fiscal adjustments plans in the 2018 national budget that would stabilise the debt burden; and changes in the administration that are expected to help eradicate policy uncertainty.
To keep unifying the governing African National Congress party, it would be essential for President Cyril Ramaphosa to restore party strength and meet reform expectations in a well-balanced manner towards the 2019 general elections, said the agency.
R&I added that the political situation in South Africa continues to entail some policy risks that warrant attention.
Meanwhile, government recognised R&I’s assessment of the challenges and opportunities the country faces in the immediate to long term.
“Government continues to work diligently on practical steps, such as the finalisation of mining legislation, to provide the necessary policy certainty, to improve South Africa’s investment and economic prospects,” assured Treasury.
Additionally, during his State of the Nation Address, in February, Ramaphosa expressed commitment and will to fast-track the implementation and finalisation of key sectoral structural reforms, as well as reforms to State-owned entities.
“Collaboration between government, business, labour and civil society is also yielding necessary interventions to positioning South Africa as an attractive investment destination while creating an enabling policy environment for inclusive economic growth,” said Treasury, adding that the R&I rating action demonstrates that South Africans that work together can achieve remarkable outcomes.