Is SA at a turning point

The confirmation of a Baa2
(a moderate credit risk)
rating by Moody’s Investors
Service over the weekend has
brought welcome respite,
with deputy president Cyril
Ramaphosa commenting
that the unchanged rating
reflects Moody’s
view that the
country is likely
approaching a
turning point.
Kristin
Lindow, senior
vice president
of Moody’s,
said while
making the
announcement:
“After several
years of falling growth
the 2016/17 budget and
medium-term fiscal plan
will likely stabilise and
eventually reduce the general
government debt metrics.
Recent political developments,
while disruptive, testify to the
underlying strength of South
Africa’s institutions.”
Ramaphosa however
cautioned that SA could not
now rest on its laurels. “It is
not over yet because there is
another rating that is coming
and this is when we must
work harder and unite and
demonstrate that South Africa
is solid, stable and a worthy
investment destination.”
Lindow
noted that
Moody’s could
change the
rating outlook
from negative
to stable if the
government
were to
deliver on
commitments
that supported
growth.
“Measures to win back
business confidence –
such as rationalising the
state-owned enterprise
sector, clarifying Black
Economic Empowerment
(BEE) regulation and
expanding the Independent
Power Producer (IPP)
framework into new areas of
infrastructure – would also
be credit positive,” she said.
INSERT & CAPTION
It is not over yet
because there is
another rating that is
coming.
– Cyril Ramaphosa