Ratings firm S&P Global has left South Africa’s sovereign rating unchanged in junk status.<\/p>\n
The group announced on Friday that it was holding SA’s long-term foreign-currency rating at \u2018BB\u2019, while the long-term local-currency rating stayed at \u2018BB+\u2019.<\/p>\n
The ratings have a stable outlook.<\/p>\n
South Africa’s government, led by president Cyril Ramaphosa, has spent much of the year trying to turn the country’s economy around, particularly by focusing on drawing back investors.<\/p>\n
However, it has faced significant hurdles along the way, including the economy slipping into recession, no good news on the unemployment front, and a shock mid-term budget that showed deeper problems with tax collection.<\/p>\n
Despite this, S&P expressed some optimism about the future.<\/p>\n
“Anaemic economic growth in 2018 and sizeable contingent liabilities continue to weigh on South Africa\u2019s fiscal prospects and debt burden,” S&P said in a statement.<\/p>\n
“Nevertheless, the new government is pursuing a series of economic reforms that should help boost the economy from 2019 onward, despite structural impediments, chronic skills shortages and high unemployment.”<\/p>\n
Speaking on the land issue, with expropriation without compensation hanging over our collective heads, S&P said that it expects that “the rule of law and enforcement of contracts will largely remain in place and will not significantly hamper investment levels in South Africa”.<\/p>\n
South Africa could face a ratings cut if the rule of law is compromised through the policies, the firm warned – but added that the country could get an upgrade\u00a0if economic growth strengthened.<\/p>\n