SA Government welcomes S&P credit rating

Pretoria - President Jacob Zuma has welcomed credit rating agency Standard and Poor's (S&P) decision to maintain South Africa's investment rating.

“The decision by S&P, which follows on the footsteps of yet another encouraging decision by Moody's, demonstrates that working together we can reignite our economy, attract investment and create jobs for our people," said President Zuma.

The President also congratulated 'team South Africa' constituted of government, business and labour for the sterling work that has been done over the last few months to turn the country’s economy around

"Let us use these positive developments to work even harder together to move South Africa forward," said President Zuma.

R25 billion spending cut

Meanwhile, Acting Director-General of GCIS Donald Liphoko noted that although S&P has affirmed South Africa’s investment rating, government wanted to reiterate that concerns raised by the ratings agency are being addressed through various government programmes and policies such as the National Development and Nine-Point Plans.

“Government is committed to cutting R25-billion spending over the next three years to ensure we implement the National Development Plan, which aims to achieve socio-economic growth and development,” Said Liphoko.

Despite the global headwinds, Liphoko added that the implementation of the Nine-Point Plan is yielding progress for the country’s economic programme.

South Africa has recently seen improvements in economic growth and employment in the sectors on energy, infrastructure development, agriculture and agro-processing, mineral beneficiation, a higher impact Industrial Policy Action Plan, small business development and encouraging private sector investment, amongst others.

International investors and multinationals continue to affirm the attractiveness of South Africa as an investment destination with new and additional investments into the country, he said.

“S&P’s announcement must be seen as motivation to further improve the economic climate of our country. We will continue to have robust engagements with business leaders as well as labour in efforts to sustain progress to move South Africa towards a sounder economic level,” said Liphoko.

The agency put South Africa’s long and short term ratings at ‘BBB-/A-3’ and ‘BBB+/A-2’ respectively.

The foreign currency bond rating remains one notch above sub-investment grade whereas the domestic currency bond rating remains three notches above sub-investment grade.