Fitch commentary on SA's election results premature & unsubstantiated - AU's APRM

JOHANNESBURG - The African Union (AU)'s African Peer Review Mechanism (APRM) has labelled rating agency Fitch's commentary on the post-election results as premature and unsubstantiated.

This after Fitch warned that a power-sharing deal between the African National Congress (ANC) and radical political outfits including the Economic Freedom Fighters (EFF) and the MK Party would have far-reaching implications on the country’s policy direction.

In its commentary, Fitch endorsed a coalition between the Democratic Alliance (DA) and the ANC.

The agency believes the DA would probably enable President Cyril Ramaphosa to continue implementing his main priorities, including tackling infrastructure issues.

It said it would likely result in the least significant changes to key credit metrics, such as South Africa's debt trajectory, over the medium term.

Affirming its position, Fitch added that a deal with the EFF or the MK Party could also pose additional challenges to macroeconomic stability through broad weakening of investor confidence or eroded governance.

But given the influence that Fitch ratings command in the global financial markets, the APRM said that their comments were politically motivated.

The APRM said that Fitch should have waited for the outcomes of the ongoing negotiations by political parties and the resulting policy choices to make conclusions.