JOHANNESBURG South Africa (Xinhua) --
Despite concerns over its fiscal
targets, South Africa is hoping that it can avert a credit
rating downgrade, Deputy Finance Minister Mcebisi Jonas said
“A lot of work has
been done and put into the ratings agencies story and I think
that we have a firm proposition,” Jonas told reporters.
The official said he
is hopeful of a turnaround of the economy in the year and noted
that there is a general consensus across the board to boost the
The credit rating
agencies have warned of a possible downgrade by the end of the
year because of South Africa’s underperforming economy with
over-expenditure and a worrying political situation.
Standard & Poor’s
has already landed in South Africa for its review, which will be
published before the end of the year.
The credit rating
agencies were concerned about the government’s ability to
maintain fiscal targets, but the South African Treasury had
convinced them that it could maintain caps on spending, said
“We need to improve
growth, we need to ensure that we stick to the fiscal path that
we have taken as a country.”
Jonas emphasized the
importance of maintaining the current ratings, as a downgrade
will have devastating implications.
The deputy minster
also noted that nepotism and corruption are undermining efforts
for a credible government.
looks beyond its own narrow confines is needed,” said Jonas, who
has been an outspoken critic of government graft. In October, he
said: “Corruption is real, it’s palpable, you can feel it.”
political elite have been involved in a slew of corruption
scandals, which have eroded the trust of investors and weighed
on Africa’s most industrialized economy.
Last week, President
Jacob Zuma survived a parliamentary no-confidence vote over
allegations of influence peddling, one of several scandals
involving him since taking office in 2009.
South Africa cabinet vows to
protect investment status
CAPE TOWN South Africa (Xinhua) --
The South African cabinet on Thursday vowed to
protect the country’s investment status as the country’s credit
rating is at the risk of being downgraded by international
“Cabinet calls on
all sectors to join government in a united front to protect our
country’s investment status,” Minister in the Presidency Jeff
Radebe said at a press briefing in Cape Town after a fortnightly
discussed, among others, issues relating to efforts to avoid a
further downgrade of South Africa’s credit rating.
ratings agencies Moody’s, Fitch and Standard & Poor’s will in
the coming weeks announce their decision on the country’s
investment rating grade.
Moody’s has warned
that it would downgrade South Africa’s rating if its economic
growth fell below its estimated growth of 0.2 percent this year.
rates South Africa two notches above sub-investment grade at
Baa2 with a negative outlook, while Fitch and Standard and Poors
rate the country one notch above sub-investment status.
South Africa’s growth to tick up to 1.1 percent in 2017 and 2.0
percent the year after. Its next review of South Africa is
expected on Nov. 25.
The rating agencies
say political infighting, weak economic growth and mounting debt
at state-owned companies all pose a downward risk.
Economists say a
further downgrade would plunge South Africa into recession.