Government notes rating decision

Tuesday, April 4, 2017

Pretoria - Government has noted the sovereign rating announcement by rating agency Standard and Poor’s (S&P) to downgrade South Africa to sub-investment grade.

“This rating announcement calls for South Africans to reflect on the need to sustain and act with urgency to accelerate inclusive growth and development so that we can reverse the triple challenge of poverty, unemployment and inequality,” said National Treasury.

The statement issued by Treasury on Monday night said reducing reliance on foreign savings to fund investment and relying less on debt to finance public expenditure will secure South Africa’s fiscal sovereignty and economic independence.

This, as S&P Global Ratings agency downgraded South Africa.

“Government notes the sovereign rating announcement by S&P. While S&P has lowered its rating of foreign currency-denominated debt to a sub-investment grade, rand-denominated debt – which constitutes 90% of the debt portfolio – retains its investment-grade rating,” said Treasury.

Government noted that while the leadership of the finance portfolio has changed, government’s overall policy orientation remains the same.

Speaking at a South African Revenue Service (SARS) media briefing earlier on Monday, newly appointed Finance Minister Malusi Gigaba said: “Government has been, and will remain, committed to a measured fiscal consolidation that stabilises the rise in public debt”.

The Treasury said the country is committed to a predictable and consistent policy framework, which responds to changing circumstances in a measured and transparent fashion.

“Open debate in a democratic society should not be a cause for concern, but reflects an important means to accommodate differing views. South Africa’s constitutional arrangements remain robust. These key institutional strengths are acknowledged by rating agencies,” it said.

Government remains committed to making sure that its work with business, labour and the civil society continues in order to improve the business confidence and implement structural reforms to accelerate inclusive economic growth, it said. – SAnews.gov.za

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