Govt expects SA credit rating to return to investment grade in 24 months

Gigaba has told Reuters that government told ratings agencies that it will to step up efforts to dispose of assets in some state-owned entities to raise money for recapitalisation.

Picture: Supplied.

JOHANNESBURG – Finance Minister Malusi Gigaba says government expects that it could take 18 to 24 months for Standard & Poor’s Global and Fitch to return the country's credit rating to investment grade.

Gigaba says that Treasury has held very positive discussions with ratings agencies on his 2018 budget presented to Parliament on Wednesday.

Moody's is the only one of the three major ratings agencies which has South Africa’s foreign currency and rand-denominated debt at investment grade.

Picture: EWn.

Gigaba has told Reuters that government told ratings agencies that it will to step up efforts to dispose of assets in some state-owned entities to raise money for recapitalisation.

The agencies have been concerned about the financial health of SOEs.

Gigaba says the government does not have the capacity to give equity to Eskom and others.

This was backed up in his budget speech on Wednesday, where the minister said the deficit needed to be tackled.

“Government still faces a revenue gap of R48.2 billion in the current year, which carries through to the outer years of the medium-term expenditure framework.”

Moody's and Fitch noted earlier this week that there were signs of positive economic and political change and government is hoping that agencies will change their ratings.

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