Financial services group Stanlib has published a graph showing South Africa’s credit rating history – climbing out of junk status during the Mandela and Mbeki years presidential years, but then slowly declining back to junk status under president Zuma.
Last week, ratings agency S&P Global followed in the footsteps of Fitch in downgrading South Africa’s credit rating to full junk status – whereby both the country’s local and foreign currency debt is rated at sub-investment grade.
Fitch’s downgrade to full junk came earlier in the year, but a third ratings agency – Moody’s – decided to hold on its rating (which is currently one notch above junk) until after the 2018 budget speech under the guidance of new ANC leadership.
According to Stanlib’s detailed graph, it is evident that Moody’s has been the holdout among the three major ratings firms, having never rated South Africa as junk since the dawn of democracy, and also having given the country its highest rating at its peak in 2008/09.
Fitch and S&P have followed a similar line in their ratings history for South Africa.
South Africa emerged from a sub-investment grade rating between 2000 and 2001, and climbed ever higher during the Mbeki years. However, following the global economic crisis, which started hitting South Africa in 2009, the economy has gradually been on a steady downgrade path.