Unic Press UK: Given the institutional and political imbroglio that had overwhelmed the South African government after the country’s president Jacob Zuma reshuffled his cabinet a few days’ ago, naming ten new ministers and ten deputy ministers, a global credit rating agency Standard and Poor (S&P Global Ratings) have downgraded South Africa.
The rating agency asserts that the executive changes that was inked by President Zuma had put the country’s fiscal and growth outcomes at risk. In its report that was published yesterday, S&P Global Ratings said:
“S&P Global Ratings lowered the long-term foreign currency
sovereign credit rating on the Republic of South Africa to ‘BB+’ from ‘BBB-‘
and the long-term local currency rating to ‘BBB-‘ from ‘BBB’. We also lowered the short-term foreign currency rating to ‘B’ from ‘A-3’ and
the short-term local currency rating to ‘A-3’ from ‘A-2’. The outlook on all
the long-term ratings is negative. In addition, we lowered the long-term South Africa national scale rating to ‘zaAA-‘ from ‘zaAAA’. We affirmed the short-term national scale rating at ‘zaA-1’.” (S&P Global Ratings: 03/04/2017)
In a nutshell, South African government debt is now junk, a high-yield, a risky investment.
