JOHANNESBURG, Sept 13 (Askume) – South Africa’s National Treasury said on Friday that plans to cut spending and raise revenue while implementing key measures were on track after credit rating agency Fitch affirmed its debt rating at ‘BB-‘ with a stable outlook.
Fitch said the key factors influencing its decision to place South Africa below investment grade included the country’s high debt-to-GDP ratio, slow economic growth and high inequality.
The rating agency said the Government of National Unity (GNU) to be formed after the May 29 general election has reduced short-term uncertainty, and the reform plan could help boost real GDP growth modestly.
Fitch Ratings acknowledged that power company Eskom’s performance had improved significantly this year, but highlighted that ongoing challenges facing state-owned logistics group Transnet were limiting its growth.
South Africa’s National Treasury responded that the government would continue to implement the “Operation Vulindlela” plan aimed at accelerating reform of the Internet industry.
“Extensive reforms are also underway in the energy, freight, water and telecommunications sectors,” it said in a statement.
The finance ministry also said it will continue to take fiscal consolidation measures and take further measures to reduce medium-term borrowings.
