S&P affirms South Africa rating on government reforms

Cyril RamaphosaRatings agency S&P on Friday affirmed its rating and outlook on South Africa's sovereign debt citing reforms pursued by Cyril Ramaphosa's government

S&P affirmed South Africa's long and short-term foreign currency sovereign credit ratings at 'BB/B' with a stable outlook. The agency expects economic growth in South Africa to pick up modestly over the next year.

S&P expects private sector investment to pick up and said that lower inflation could boost household disposable income.

"Since Cyril Ramaphosa's election as African National Congress (ANC) leader in December 2017 and appointment as the country's President in February 2018, business and investor confidence have strengthened," S&P said in a statement.

Among other reforms, Ramaphosa has promised to tackle corruption and turnaround poorly run state-owned companies by appointing former finance minister and investor favourite Pravin Gordhan as minister of public enterprises.

Last month, Moody's changed its outlook on South Africa to "stable" from "negative" and halted a further downgrade of the country's debt into junk territory.

Ramaphosa succeeded Jacob Zuma, who stepped down in the face of allegations of corruption and favouring the Gupta family in awarding state contracts.

South Africa was hit by a string of downgrades from all three major rating agencies last year, after Zuma fired Gordhan in a cabinet reshuffle, triggering a fall in the Rand.

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