The international credit rating agency, Fitch, has opted to maintain South Africa’s credit rating at BB- with a stable outlook. This decision marks the fifth consecutive time that Fitch has refrained from altering South Africa’s credit rating since December 2021.
Despite the stability in outlook, Fitch expressed apprehensions regarding the country’s sluggish economy and the escalating government debt. The credit report released on Friday outlined several factors that contributed to maintaining the current stable outlook.
Acknowledging South Africa’s persistent energy challenges and logistics sector difficulties, Fitch highlighted the positive impact of government interventions. These interventions encompass plans to enhance power grid capacity, the recent R50 billion guarantee facility extended to the financially strained Transnet, and the anticipated benefits of Operation Vulindela in unlocking the country’s growth potential.
However, Fitch cautioned that some of the structural reforms in the pipeline might not be substantial enough to completely address the challenges at hand. The agency also underscored its vigilance concerning policy uncertainty, with a particular focus on governance issues within the African National Congress (ANC) in the lead-up to this year’s general elections.