Gauteng-based rating organization Sovereign Africa Ratings (SAR) recently published its findings on South Africa’s creditworthiness, reportedly assigning the country a BBB long-term and B+ short-term grade along with a steady credit outlook.
Apparently, the agency’s assessments of the nation's sovereign status differ from those of the ‘big three’ rating agencies, namely Moody's Investors Service, Fitch Ratings, and S&P Global Ratings, who collectively monitor nearly 95% of the global rating activity and have each been in operation for more than a century.
SAR claims that to arrive at its current findings, it took into account the assessment and direction of the South African economy in terms of key indicators and variables. These include government debt, stance on fiscal & monetary policies, natural resource endowments, economic growth, and climate change risks.
According to the agency’s report, the ratings were also supported by the country's recovery and reconstruction plan. This plan sought to address some of South Africa’s challenges, such as deteriorating infrastructure, poverty, energy & water crises, income inequality, high unemployment, and logistics networks.
Chief ratings officer David Mosaka has observed that the South African government was perfectly capable of meeting its debt obligations, with the agency’s rating supporting this claim.
With the publication of its first assessment report on South Africa, SAR has taken a stand against corporate behemoths who have long faced criticism from African nations for their ruthless yet organized approach to credit rating decisions.
As per reliable sources, SAR has vowed to better serve the interests of the continent by promising to be unique and more comprehensive in its evaluations.
Moreover, SAR CEO Sifiso Falala has claimed that the agency’s aim is to be innovative and provide sovereign ratings in a responsible and accountable way that is not based on the vested interests of individuals.