Standards and Poor (S&P) has downgraded South Africa to junk - South Africa Long-Term Foreign Currency Rating was cut To 'BB+’ based on political and institutional uncertainty, meanly a outlook negative said Dennis George FEDUSA General Secretary. The downgrading was blamed on the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.
S&P said the contingent liabilities to the state are rising, therefore the rating agency has therefore decided lowering our 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’. Moreover, the negative outlook reflects the view that there is at least one in three probability that budgetary performance, debt levels, and economic growth will deteriorate beyond our current baseline expectations.
S&P 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 longterm ratings is negative. The reasons for the deviation are the heightened political and institutional uncertainties that have arisen from the recent changes in executive leadership.
The next scheduled rating publication on the sovereign rating on the Republic of South Africa will be on June 2, 2017.
FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry. See www.fedusa.org.za for more information.