Ratings reprieve for South Africa welcomed
Cape Town, South Africa (PANA) – Business leaders have welcomed the decision by Moody's rating agency not to update its ratings on South Africa's sovereign debt, but warned that the country is not out of the words yet.
The rating remained unchanged at Baa3, the last rung of investment grade, with a stable outlook. Moody’s is the only major rating agency that rates South Africa’s sovereign debt at investment grade.
Friday’s decision is crucial because a downgrade to junk status would have triggered South Africa’s exclusion from the Citi World Government Bond Index and the expected capital outflows of hundreds of billions of Rands.
The CEO Initiative, a grouping of business leaders, on Saturday said the reprieve would provide government and its partners with a final chance to implement critical structural reforms to achieve sustainable inclusive growth.
"While we welcome this decision, it is also a reminder of the urgent task ahead for government and its social partners to work relentlessly on avoiding any further downgrades in our credit ratings," said Jabu Mabuza, co-convenor of the CEO Initiative.
He added that there needs to be an accelerated focus on implementing the necessary reforms that are needed for the country’s key institutions and entities to operate at optimal levels again
The Banking Association of South Africa said government needs to take "hard decisions" to implement structural changes in order to boost growth.
-0- PANA CU/VAO 30March2018
