15 June 2015
South Africa has noted the decision by international ratings agency Standard and Poor’s to affirm the country’s long and short term foreign and local currency issuer default ratings at BBB-/A-3 and BBB+/A-2, respectively.
The agency also affirmed the stable outlook, the National Treasury said today.
Standard and Poor’s acknowledged that South Africa had several strengths, including broad political and institutional stability, policy continuity, and fiscal prudence, which would help to contain the country’s fiscal and external balances and deep financial markets.
“While S&P noted that growth in 2015 would be limited as a result of electricity supply shortages, the agency said it expected growth to increase over 2016 to 2018 as electricity supply, domestic consumption and net exports improved. [The ] government has committed to redouble the efforts to deal with the challenges identified by S&P,” the Treasury said.
Insofar as the energy constraints were concerned, efforts to resolve the challenges were well under way. “Eskom will be capitalised in a deficit neutral manner as per plan; independent power producers are delivering close to 2 000 megawatts [MW] of electricity and more have been contracted that will take their contribution to around 5 000MW when construction of the plants is completed,” it explained.
The implementation of the National Development Plan was becoming embedded in the way the government worked as it started with a granular plan on the ocean economy, the Treasury said, and it was being extended to agriculture and other areas of delivery.