New finance minister Nene to meet credit rating agencies

Reading Time: 2 minutes

South Africa’s newly appointed Finance Minister Nhlanhla Nene said on Tuesday after being sworn into office that his department has lined up meeting with rating agencies.

Speaking to Reuters minutes after being sworn in parliament, Nene said it was too early say if South Africa will be downgraded by Moodys, which rates the country a notch above junk, and is due to make decision at the end of March.

“There are meetings already lined up with the ratings agencies, because after the budget there is a programme to do just that,” Nene told Reuters in the president’s office in parliament on Tuesday.

“It is too early to say,” Nene said in response to a question as to whether he thought Moody’s would downgrade South Africa’s credit rating.

Nene said his predecessor’s budget presented last week might not prevent further credit ratings downgrades as new President Cyril Ramaphosa tries to revive the economy.

The state of government finances forced the Treasury last week to take the politically risky step of raising value-added tax for the first time in 25 years.

The move was welcomed by ratings agencies and markets priced in expectations that it would enable South Africa to hang on to its last investment grade rating in a Moody’s review due soon.