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The South African Chamber of Commerce and Industry (Sacci) on Monday expressed concern about South Africa’s credit rating outlook, which was lowered from stable to negative.
On Friday, Fitch Ratings downgraded South Africa’s long-term foreign credit rating outlook citing limited progress with issues such as chronic unemployment.
The outlook downgrade comes a year after South Africa achieved its stable outlook.
“South Africa needs to increase the rate of investment, savings and job creation. It is also paramount that economic policies be transparent, predictable, consistent with future debt sustainability and supportive of business growth,” said Sacci CEO Neren Rau in a statement.
He added that strong rigidities in the labour market contributed to jobless growth, increasing pressure on social spending and grants. This was despite the National Treasury’s aim of changing the country’s composition of expenditure away from consumption.
While Fitch sees the threat of nationalisation as “remote”, it stated that the debate had upset investor confidence and warned that steps to nationalise mining assets could have “immediate and negative consequences” for the country’s rating.
The National Treasury said in a statement on Friday that it viewed the downgrade in the context of "the challenges that the global economy is going through and the persistent uncertainty in the global economic environment”. It added that South Africa remained committed to the prudent execution of growth and policies that boosted employment.
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