Photo: Jessica Rinaldi, Reuters

S&P Global Ratings has just announced that it has affirmed its long- and short-term 'BB+/B' foreign currency and 'BBB-/A-3' local currency sovereign credit ratings on the Republic of South Africa. The ratings agency’s  outlook remains negative. At the same time, it affirmed the 'zaAA-/zaA-1' South Africa national scale ratings.

The South African government has also reacted to the announcement by welcoming  S&P’s decision of maintaining South Africa’s long term local currency debt ratings of ‘BBB-‘; an investment grade rating.

The government has however indicated that whilst it agrees with S&P that the pace of economic growth is slow and as such poses risks to fiscal consolidation and rising contingent liabilities, the fiscal policy stance continues to be guided by chapter 13 of the Constitution.

The government stated that while there is promotion of efforts aimed at economic development, good governance, social progress and rising standard of living for all South Africans, there must also be transparency, accountability and sound financial controls in the management of public finances.

The government has indicated that it will safeguard confidence and reclaim the investment grade ratings.

It will also continue with its engagements with broader stakeholders. The government has also pointed out that sustainable fiscal policy and efforts to tackle sources of low growth are critical. The government will focus on implementing policy design, finalisation of key policies in order to boost confidence and economic growth. At this stage government is  re-engaging with the private sector to make sure that the joint work of government, business, labour and the civil society continues and that the pledges made so far are fulfilled.

More on this story tomorrow on Business Report