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Fitch: Mahlobo appointment sends mixed signals on SA nuclear programme

While Finance Minister Malusi Gigaba indicated that we don't have enough money for the project, Fitch says it seems that government is still pushing for the project to go ahead with the new Energy Minister driving the process.

FILE: Minister of Energy David Mahlobo. Picture: GCIS

CAPE TOWN - Global ratings agency Fitch has raised questions about whether South Africa's big nuclear build really is on the back burner.

Finance Minister Malusi Gigaba, in his medium-term budget policy statement, indicated that we don't have enough money for the project.

But in a bleak statement released on Thursday, Fitch says that the appointment of David Mhlobo as the new Energy Minister sends contradictory signals.

Fitch is sceptical about the status of the nuclear build, as the massive programme would see the construction of between six and eight nuclear plants with a very hefty price tag, a price tag South Africa just can't afford at the moment.

Gigaba made that point crystal clear in his medium-term budget speech but ratings agency Fitch says it seems that government is still pushing for the project to go ahead with the new Energy Minister driving the process.

Fitch's statement also raised concerns about the lack of a proper plan to cut spending or to raise revenue, saying that it suggests deep divisions within the ruling party.

Fitch has already downgraded both the country's foreign and local denominated debt to sub-investment grade.

Moody's and S&P Global have taken a wait and see approach.