S&P Global Ratings unexpectedly lowered its outlook on South Africa’s junk-rated debt to stable from positive, dealing a blow to the country’s efforts to regain an investment-grade rating.
The company revised the outlook while affirming the nation’s long-term foreign-currency rating at BB-, three notches below investment grade, according to a statement late Thursday. Its first South Africa sovereign credit rating action of 2023 had been expected May 19.
“We could raise the ratings if there is an improving track record of effective reforms, resulting in structural improvements in economic growth alongside a reduction in public debt and contingent liabilities,” S&P said.South Africa is enduring its worst period yet of electricity rationing, known locally as load shedding, as Eskom Holdings SOC Ltd.
South Africa’s track record of procuring and constructing sufficient additional capacity to offset breakdowns and maintenance of its mostly coal-fired electricity production fleet has been poor, S&P said.
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