ANC STATEMENT ON CREDIT RATINGS REVIEW OUTCOME

26 November 2016

The African National Congress has noted the outcome of the credit rating reviews announced by rating agencies, Fitch Ratings and Moody’s Investor Service, yesterday. Fitch affirmed South Africa’s Long-Term Foreign and Local Currency Issuer Default Ratings at ‘BBB’ and revised the outlook from stable to negative. Moody’s kept the sovereign rating unchanged at Baa2 with a negative outlook.

The outcome of the credit rating reviews are reflective of an appreciation by the rating agencies of the efforts the ANC led government has made in the midst of a depressed global economy to steer the economy on a sustainable path. It is further an indication of the concerted effort that has gone into confronting and dealing with the challenges we are facing in order to bring out stability and fiscal consolidation. Such measures are undertaken not with the intention to appease rating agencies, but rather to ensure that public finances continue to be managed in a manner conducive to the raising of the level and inclusivity of economic growth.

The ANC has further noted concerns of “political risk” and “political uncertainty” raised by the rating agencies, with Fitch in particular citing the ANC’s upcoming 54th National Conference as a reason. The ANC finds these concerns very curious given that political contestation of leadership is a regular feature of any democracy.

The conference’s impact on governance and macroeconomic performance is an untested and unscientific observation, serving no purpose except to amplify unfortunate and negative narrative distracting from the real constraints to significant and inclusive economic growth. It is further an unnecessary conflation of state and party, mischievously selecting to ignore South Africa’s very unambiguous policy positions and government’s commitment to fiscal consolidation, which is wholly supported by the African National Congress.

The ANC welcomes the affirmation of gradual recovery in growth in our economy in the coming years and commends government, business, labour and civil society for their collaborative approach aimed at building greater confidence in the economy. We further trust such cooperative approach will be sustained, directing itself to dismantling the residual structural constraints to growth in our economy in order to deal more comprehensively with unemployment, inequality and poverty.

Statement issued by ANC spokesperson, Zizi Kodwa, 26 November 2016