The Banking Association South Africa welcomes the decision by Moody’s to keep South Africa’s credit rating at investment grade, now with a stable outlook.
All South Africans – business and consumers – will benefit from this show of confidence in the progress the country has made in addressing some of the concerns previously raised by the rating agency, and in its economy that is beginning to show some growth.
Another sovereign credit rating downgrade would have inevitably been reflected in the ratings of South Africa’s banks, and increased the cost of borrowing for the country, companies and financial institutions, as well as making it harder to secure essential investment. In the end, all South Africans would have felt the burden.
Recognition must be given to the efforts by the National Treasury, labour and business leaders who worked together to persuade the rating agency – and the broader investment community – that South Africa is determined to achieve sustainable, inclusive economic growth. This ratings decision is a clear indication of what can be achieved by strong leadership, which is committed to acting in support of good governance.
However, South Africa will only regain its investment rating from all three major credit rating agencies, once it achieves sustainable levels of higher economic growth and tackles its unacceptably high rates of unemployment, poverty and inequality. The country needs:
South African banks are willing to work with government and other stakeholders to ensure that we make the best use of this opportunity to build an inclusive economy.