S&P sovereign analyst Gardner Rusike said the agency believed the Ramaphosa administration would continue with policy reforms after the May 8 election.
Rusike said the country would be better off with a reform-minded united majority party such as the ANC.
“We think the new administration that came into office in February 2018 will continue on the path that they have started,” Rusike said.
“Our best-case scenario is that the ANC will win the elections next month. With our stable outlook, we think the government can implement the necessary reforms.”
S&P cut South Africa’s debt assessment to sub-investment grade in 2017 after former President Jacob Zuma axed Pravin Gordhan as finance minister in a mass cabinet reshuffle.
The IMF, however, took a more pessimistic view of the country, saying its revised forecast reflected the continuing policy uncertainties after the election.
The IMF’s projection is also worse than those of the National Treasury, which pegged growth at 1.5percent this year.
Moody’s last month decided not to update South Africa's rating - effectively leaving it at investment grade with a stable outlook - in a move largely seen as giving Ramaphosa space to implement his reform agenda after the elections.
Hugo Pienaar, economist at the Bureau for Economic Research, said investors had already taken a decisive victory for the ANC next month for granted.
“There seems to be a narrative from both local and foreign investors that if the ANC gets 60percent of the vote, Ramaphosa will have a freer rein to push through the necessary reforms. In that scenario, we might see a repeat of the Ramaphosa of last year where the markets rallied,” Pienaar.
“We are a bit sceptical that this magical 60percent number will see reforms follow. I think that narrative shows a misunderstanding of internal ANC dynamics.”
Political economist Nic Borain said Ramaphosa had built up a lot a political capital.
“He has built a lot of currency that has a high value and he has to start spending it, meaning he has to start implementing some unpopular reforms,” Borain said.
S&P, however, warned that Eskom’s financial state, the “energy supply constraints”, and other state-owned entities would continue to exert pressure on the country's credit rating.
Rusike said S&P was not fazed by expropriation of land without compensation and the nationalisation of the Reserve Bank, as most central banks in the sovereigns it rates were owned by governments.
“On land expropriation, we think that inasmuch as the discourse talks about expropriation, we believe it has to do more with land reform. We think the ANC have been conservative in the past. They will remain conservative in the way they manage the land issue.”