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Maano Capital Pty Ltd, 2013/181382/07 is an authorized financial services provider (FSP 55112) in terms of section 8 of the Financial Advisory and Intermediary Act 37 of 2002. Maano Capital is authorized to provide advice and intermediary services in the following categories: money market instruments, derivative instruments, long and short term deposits, structured deposits, participatory interests in CIS, shares, bonds, debentures and securitized debt, forex investments and short-term commercial insurance. Maano Capital is a registered credit provider NCRCP22459.

Fitch Upgrades RSA Credit Rating to BB flat.

  • Writer: Fulu Mudau
    Fulu Mudau
  • Jun 6
  • 1 min read

Yesterday evening Fitch Ratings upgraded South Africa's credit rating from BB- to BB flat. Upgrades to sovereign credit ratings are quite rare, so this is quite an achievement by National Treasury.


The main reason for the upgrade is fiscal discipline - SARS has improved tax collections while NT has curbed spending, resulting in primary fiscal surpluses for the past couple of years.


Unfortunately Fitch highlights that further upgrades are constrained by the persistently low GDP growth. Over the past decade the average GDP growth rate has been under 1.0%. The low GDP growth is a drag of the debt/GDP ratio, which at around 80% is significantly higher than investment grade economies.


To maintain this positive momentum in credit profile, RSA needs to ensure the increased political risk does not translate into real economic losses. The biggest wins for the government will come from successfully stimulating economic growth. The fundamental cause of the current unrest in the country is pervasive unemployment, decreasing per capita GDP and stark income inequality.


The recent SIU government corruption-related arrests and the progress in rail reforms are both positive green shoots in the right direction. However, much more work needs to be done.


credit risk
credit risk

 
 
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