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South Africa generally has a good credit quality and its default risk currently remains low, according to Sovereign Africa Ratings (SAR).
The agency announced its findings on the country’s creditworthiness on Friday, giving South Africa a BBB long-term and B+ short-term rating, with a stable outlook.
Its views of the country’s sovereign status contradict those of the ‘big three’ – Moody’s Investors Service, S&P Global Ratings and Fitch Ratings – which together account for about 95 percent of international rating activity, having all been around for over a hundred years.
SAR says to reach its findings, it considered “the direction and assessment of the South African economy in terms of key indicators and variables”, including natural resource endowments, climate change risks, economic growth, and government debt, as well as monetary and fiscal policy stance.
Supportive factors
“The ratings are also supported by the country’s reconstruction and recovery plan.
This aims to address some of the country’s challenges such as high unemployment, poverty and income inequality, energy, and water crises, as well as deteriorating infrastructure and logistics networks,” the agency says in its report. – Moneyweb
Online Reporter