On April 3, 2017, S&P Global Ratings lowered the long-term foreign currency sovereign credit rating on the Republic of South Africa to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB'.
We also lowered the short-term foreign currency rating to 'B' from 'A-3' and the short-term local currency rating to 'A-3' from 'A-2'. The outlook on all the long-term ratings is negative.
In addition, we lowered the long-term South Africa national scale rating to 'zaAA-' from 'zaAAA'. We affirmed the short-term national scale rating at 'zaA-1'.
The next scheduled rating publication on the sovereign rating on the Republic of South Africa will be on June 2, 2017.
OVERVIEW
In our opinion, the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.
We assess that contingent liabilities to the state are rising.
We are therefore lowering our long-term foreign currency sovereign credit rating on the Republic of South Africa to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB'.
The negative outlook reflects our view that political risks will remain elevated this year, and that policy shifts are likely, which could undermine fiscal and economic growth outcomes more than we currently project.
