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South Africa Long-Term Local Currency Rating Lowered To 'BBB'; Foreign Currency Ratings Affirmed; Outlook Still Negative

5th December 2016


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  • South Africa Long-Term Local Currency Rating Lowered To 'BBB'; Foreign Currency Ratings Affirmed; Outlook Still Negative
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South Africa continues to depend on resident and nonresident purchases of rand denominated local currency debt to finance its fiscal and external deficits. Its financing needs have risen beyond our previous expectations, with general
government debt set to increase by an average of 4.9% of GDP over 2016-2018, to reach gross debt of 54% of GDP in 2019. The proportion of rand in global foreign exchange turnover has also declined to just below 1% on average over the past three years.

We also believe political events have distracted from growth-enhancing reforms, while low GDP growth continues to affect South Africa’s economic and fiscal performance and overall debt stock.


We are therefore lowering our long-term local currency rating on South Africa to 'BBB'. We are affirming all other ratings.
The negative outlook reflects the potentially adverse consequences of persistently low GDP growth for the public balance sheet.

Rating Action
On Dec. 2, 2016, S&P Global Ratings lowered the long-term local currency rating on the Republic of South Africa to 'BBB' from 'BBB+' and affirmed the 'A-2' short-term local currency ratings. We affirmed the long-and short-term foreign currency ratings at 'BBB-/A-3'. The outlook on the long-term ratings remains negative. At the same time, we affirmed the 'zaAAA/zaA-1' South Africa national scale ratings.



Report by S&P


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