Ramaphosa’s Sona ‘short on specifics’, says Fitch

Fitch is one of two major rating firms to have South Africa's sovereign debt in junk status – with a long-term foreign-currency rating of BB+.

President Cyril Ramaphosa waits to deliver his State of the Nation address at Parliament in Cape Town on 13 February 2020. Picture: AFP

JOHANNESBURG/CAPE TOWN - Ratings agency Fitch said President Cyril Ramaphosa's his State of the Nation Address (Sona) offered only partial details on key policy areas, like the electricity sector and underscored a weak outlook for the country's creditworthiness.

In his address on Thursday night, Ramaphosa admitted that South Africa must fix its strained public finances and procure more renewable energy to ease crippling power shortages.

But Fitch said the President was short on specifics that may have reassured investors that his government had a clear plan to solve the deep-seated structural problems in the country’s most industrialised economy.

Fitch is one of two major rating firms to have South Africa's sovereign debt in junk status – with a long-term foreign-currency rating of BB+.

It put that rating on a negative outlook in July due to concerns over rising government debt and slow growth.

Fitch said Ramaphosa's speech left important questions unanswered.

The agency said it also did not expect Finance Minister Tito Mboweni to make clear commitments on reducing the public-sector wage bill in his Budget speech later this month.

Moody's is the last major ratings agency to have South Africa on an investment-grade rating. It is scheduled to review that next month.

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Ramaphosa said members of the Economic Freedom Fighters (EFF) showed disregard for ordinary South Africans when the party delayed his State of the Nation Address (Sona).

He spoke to the media on Friday shortly after teeing off during the annual Presidential Golf Challenge at Atlantic Beach in Melkbosstrand.

On Thursday night, the EFF objected to former President FW de Klerk’s presence before demanding Public Enterprises Minister Pravin Gordhan be sacked.

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Ramaphosa said the nearly two-hour delay of his Sona speech was disappointing and almost overshadowed the good message he had for South Africans.

He said young South Africans wanted to know what he had in store for them in terms of job creation.

“Ordinary people out there wanted to know about how we’re going to guide the economy forward. Young people wanted to hear more about what is in store for them regarding jobs. But in the end, we came out with a very good message.”

Ramaphosa also mentioned his plans for struggling Eskom and what his government was doing to drive the economy.

“Bear in mind that the load shedding will continue to happen and that the executives at Eskom will continue to try everything that they can to stabilise Eskom and the electricity generation.”

On the actual golf challenge, he said the annual event working with his foundation would raise about R10 million to benefit the youth.