Honeymoon Is Over As Fitch Raises ‘Ramaphoria’ Doubts

PICTURE: Anadolu Agency

JOHANNESBURG: Fitch rates both South Africa’s foreign and local currency debt at ‘BB+’, one notch below investment grade.

Fitch affirmed South Africa’s sub-investment grade credit rating and kept its stable outlook on Friday, citing signs of improvement in governance standards and prospects of mild cyclical economic recovery.

Fitch rates both South Africa’s foreign and local currency debt at ‘BB+’, one notch below investment grade.

However, the rating agency also noted “indications that financial challenges at key state-owned enterprises remain substantial and the fact that government debt has yet to stabilise”.

Africa’s most industrialised economy has barely grown in the past decade with fiscal missteps and government corruption contributing to weak business and consumer confidence.


Investor sentiment has picked up since President Cyril Ramaphosa pledged to clean up the graft and misgovernance that critics say bedevilled the administration of his predecessor Jacob Zuma, who was forced from office in February by the ruling African National Congress.

But Fitch doubted that Ramaphosa’s efforts would make a significant difference. 

“Current government initiatives are unlikely to improve trend growth significantly, as their implementation and timeline are uncertain and their impact on growth ambiguous,” Fitch said.

The economy suffered its worst quarterly contraction in nine years in the first three months of this year in a cautionary reminder of the huge challenge facing Ramaphosa.

  • Reuters