Credit rating: Will recent political events cost SA?

There are concerns that recent political events will be taken into account when S&P Global announces its rating on Friday.

Credit rating agency Standard & Poor's. Picture: AFP

JOHANNESBURG - With the final credit rating due to be delivered in the next 24 hours, there are concerns that recent political events and unemployment figures will be taken into account when S&P Global announces its rating.

Last week, Moody's and Fitch announced that their ratings would remain unchanged, with Fitch adjusting its outlook to negative.

However, both cited concerns about political instability.

Moody's and Fitch outlined political instability and problems with state-owned enterprises as major stumbling blocks.

Economists say apparent divisions within the governing party, as highlighted in the latest ANC NEC meeting, are concerning.

However, economist at Pan-African Investment and Research Dr Iraj Abedian says it’s good that the problems are now out in the open.

“It’s essentially an open acknowledgement by the governing party that things are in chaos at home.”

He says the NEC meeting was also a warning for President Jacob Zuma.

“Therefore to the extent that reduces his (President Zuma) scope for abuse of power.”

South Africa survived a credit downgrade in June, but S&P Global will be taking a number of factors into account when deciding to keep the country above junk status.

(Edited by Zamangwane Shange)