Moody’s to Visit South Africa in Coming Weeks, Buthelezi Says

JOHANNESBURG (Capital Markets in Africa) – A team from Moody’s Investors Service will visit South Africa in the coming weeks after the ratings company put the nation on review for a downgrade early this month, Deputy Finance Minister Sfiso Buthelezi said.

The National Treasury has concluded an international roadshow and will give an update on its outcomes at a later date, Buthelezi told reporters in Johannesburg on Friday.

Buthelezi was appointed on March 31 as part of a cabinet reshuffle in which President Jacob Zuma replaced Pravin Gordhan as finance minister with Malusi Gigaba, the former home affairs minister who has no financial background. That was four days after Zuma ordered Gordhan back from investor meetings in London. S&P Global Ratings and Fitch Ratings Ltd. cut the nation’s credit rating to junk after the changes to the executive, citing fears about policy uncertainty.

Gigaba said on April 21 he had “constructive” talks with Moody’s to address the company’s concerns about South Africa’s fiscal policy and political stability. Moody’s put the nation’s credit rating, which is at the second-lowest investment grade level, on review for a downgrade on April 3.

Zuma, whose term as leader of the ruling African National Congress ends in December, has said he wants to embark on so-called radical socio-economic transformation to tackle racial inequality and widespread poverty. Inequality can lead to instability, which affects investor confidence, Buthelezi said.

“If you are unstable you can’t get investments,” he said. “We must make sure we give economic citizenship to all our people. It will augur well for investments going forward.”