S&P cuts South Africa’s rating

Ratings agency Standard’s and Poor’s slashed South Africa’s sovereign debt rating on Friday by one notch, blaming unrest affecting the country’s key mining sector.

Following in the tracks of Moody’s which downgraded South Africa last month, S&P slashed the country’s benchmark credit rating from BBB+ to BBB.

“In our view, the strikes in South Africa’s mining sector will likely feed into the political debate in the run-up to the 2014 elections, which may increase uncertainties related to the African National Congress’ future policy framework,” the agency said.

“We also expect that South Africa’s underlying social tensions will increase spending pressures and reduce fiscal flexibility for the government,” it said.

Work stoppages in the continent’s economic powerhouse started in August with workers downing tools at Lonmin platinum mine.

Since then, more than 50 people have been killed in rolling strikes that have frequently turned violent and sent investors worrying.

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S&P cuts South Africa’s rating