South Africa's credit rating could get downgraded deeper into junk status if political uncertainty triggered by the recent firing of the finance minister stalls reforms needed to grow the economy, an executive from S&P Global Ratings said this week.
"There are risks that potential growth outcomes could be weakened, especially with uncertainty that's been brought along in a year where you may not get strong decisions for strong reform programs," said Gardner Rusike, the associate director and lead analyst for South Africa at S&P.
S&P downgraded South Africa's sovereign credit rating to BB+ with a negative outlook from BBB- grade on April 3, saying the firing of its internationally respected finance minister Pravin Gordhan posed a major risk to fiscal policy. The new Finance Minister Malusi Gigaba has said Treasury is committed to fiscal consolidation plans outlined in the 2017 budget after S&P and Fitch downgraded the country to sub-investment grade.
Rusike said political jostling ahead of the ruling African National Congress's conference at year-end, where the party will elect leaders to contest general elections in 2019, was likely to distract government from implementing economic reforms.
"You are probably looking at a much longer time line when you are talking about the path of economic growth that can help to stabilise debt," Rusike said. "We've had three downgrades over the last four or five years which means that the credit story for South Africa has been deteriorating."
The country's net debt currently sits just below 50 percent of gross domestic product, at around 2.2 trillion rand ($165 billion), and in recent budgets the treasury has said the cost of servicing that debt has been one of the fastest growing items.
A total of 5 504 022 people travelled across South Africa’s borders between 9 December 2016 and 14 January 2017, says Home Affairs Minister Malusi Gigaba.
This marks an increase of 200 467 movements, or 3.78 percent, at the ports of entry nationally when compared to the corresponding period over the previous holiday season. “The 2016/17 festive season was marked by increased movement of people and goods across borders for different reasons varying from cross-border employment and business to academic and educational endeavours.
“We also observed a high number of travellers crossing borders for holiday and tourist purposes, which is one of the important priorities for the country,” said the Minister at a media briefing on the latest festive season traveller statistics in Pretoria on Wednesday.
Minister Gigaba said South Africa remains an attractive tourist destination. The top 10 nationalities that arrived in South Africa during the period were from Lesotho, Zimbabwe, Mozambique, Swaziland, Botswana, United Kingdom, United States, Namibia, Germany and Zambia.
The top 10 ports of entry used by travellers between 9 December 2016 and 14 January 2017 were Oliver Tambo International Airport, Beit Bridge, Lebombo, Maseru Bridge, Ficksburg, Cape Town International Airport, Oshoek, Kopfontein, Ramatlabama and Groblers Bridge.