South Africa keeps careful eye on capital markets access

The Republic of South Africa had a difficult end to 2015. Fitch cut the country’s credit rating one level on December 4 to BBB-, the lowest notch in investment grade, and in line with the assessment of S&P, which lowered its outlook to negative from stable on the same day. Just days later, President Jacob Zuma abruptly replaced his finance minister, Nhlanhla Nene, with David Van Rooyen and then a few days later — after strong local and international criticism — reappointed Pravin Gordhan. who had held the job between May 2009 and May 2014. The country’s growth has disappointed over the last year and is expected to continue to do so, as power shortages and job strikes take their toll. Meanwhile, the government’s decision not to tighten fiscal policy in the face of weakening revenue and rising debt levels has been heavily criticised, with Fitch naming it as one of factors behind the downgrade. At GlobalCapital’s roundtable, held in Cape Town on November 26, South Africa’s National Treasury, sub-sovereign issuers and leading bankers discussed how best to access the capital markets at this difficult point in time, and their outlook for the South African economy.