PRETORIA – Finance Minister Pravin Gordhan has praised Johannesburg for performing so well that it has been upgraded by Fitch, only two weeks after the ratings agency downgraded South Africa.
On Friday Fitch said in a statement, “The agency has upgraded the (city’s) National Long-term rating and the national senior unsecured ratings on outstanding bonds to ‘AA'(zaf) from ‘AA-(zaf)’, and affirmed the National Short-term rating at ‘F1+(zaf)’. The Outlooks are Stable.”
In a statement released by the National Treasury on Sunday, Gordhan said he welcomed the news.
“More than ever‚ South Africa needs cities that are financially sustainable and able to invest in infrastructure that improves the lives or our people…. Cities are engines of economic growth. If South Africa is to reach higher levels of growth‚ it will depend on the performance of our city governments. It will be through cities that South Africa can achieve ‘inclusive growth’‚ the kind that reduces economic inequality and creates productive economic opportunities for the poor and the vulnerable.”
On 4 December Fitch cut South Africa’s debt to one notch above “junk” status, which one financial paper said was an indictment of the government’s persistent fumbling of policies that could help to boost growth and woo foreign investors. Several days later President Jacob Zuma replaced finance minister Nhlanhla Nene with an unknown backbencher Des van Rooyen, which further pummeled local markets.
Ratings agency Standard & Poor’s has also lowered its outlook on South Africa’s debt to negative from stable.