Ratings agency S&P Global revised South Africa’s credit rating outlook to stable from positive on Wednesday, while affirming the long-term foreign and local currency debt ratings at BB- and BB, respectively.
In a late-night statement the agency said economic growth faced increasing pressure from infrastructure constraints, particularly severe electricity shortages.
S&P said reforms to address infrastructure shortfalls and to improve governance and performance at
state-owned enterprises were slow and impeding economic growth.
But on a positive note, the agency acknowledged that the country’s fiscal position improved in 2022 as tax revenue rose.
The was a positive impact due to relatively high metal and minerals prices, and rising profitability in the finance and
manufacturing sectors, it said.
In response, government said it would take urgent measures to reduce load-shedding in the short-term and transform the sector through market reforms to achieve long-term energy security.
The government said other reforms were under way to improve performance in the transport sector, in particular
freight rail to boost the economy.