Common sense prevails at Moody’s – Dr Roelof Botha

The last week of March provided the SA economy with reason to cheer, as influential ratings agency Moody’s decided to maintain the status of the country’s sovereign debt at above investment grade. And for good measure, Moody’s also chipped in with an unexpected bonus in the form of an improvement to the ratings outlook, namely from negative to stable.

Although there was never a guarantee that Mr Ramaphosa would be the victor and also assume the country’s presidency in early 2018, the patience and foresight of Moody’s has now been rewarded. The outlook for SA’s public finances and the economy at large has improved to such an extent that many of the right boxes required for investment grade status are now being ticked.

Reading between the lines of the Moody’s statement that was released on 23 March, it is clear that a subtle challenge to the SA government was included, namely to strengthen the public sector institutions via improved management, financial viability and overall functionality.

Moody’s seems optimistic that progress will be made with this quest, which will eventually support higher economic growth and a concomitant increase in fiscal revenues.

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