Browsing: South Africa economic outlook

• In 1923, South Africa had over 40 municipalities and 18 private companies, each struggling to dominate the industry.
• Despite the efforts of the SA government to ensure no severe loss, the power outages alone have caused its economy’s GDP to reduce by 1.3%.
• Eskom is about $25.6 billion in debt, which stems from its days as Escom.

Eskom’s corruption and inability to provide suitable power is plaguing South Africa’s economy. The persistent power shutdowns, or load shedding as it is known in South Africa, has significantly hindered the country’s economic growth despite steadily leading Africa’s technological revolution. While weathered power plants have contributed to the meltdown, corruption has been the single biggest contributor to the current power crisis.  

South Africa is the most industrialized country in Africa. According to Statista, South Africa had the second-highest GDP in 2021 and pioneered Africa in the 4th Industrial revolution. Unfortunately, it is also …

South African Credit rating agencies, Moody’s and Fitch, have both downgraded South Africa’s credit rating. The country’s credit rating further plummeted into junk territory making debt issuance both difficult and expensive

Moody’s dropped the credit rating two steps below investment grade to Ba2 from the previous Ba1 level.

”The downgrade reflects the impact of the pandemic shock, both directly on the debt burden and indirectly by intensifying the country’s economic challenges and the social obstacles to reforms.

South Africa’s capacity to mitigate the shock over the medium term is lower than that of many sovereigns given significant fiscal, economic and social constraints and rising borrowing costs.” Moody rating action report

 

Additionally, Fitch stepped down the countries rating to a BB minus which is three positions below investment grade.

The ratings apply to both local and foreign borrowing.

Another credit rating agency S&P maintained South Africa’s rating which is currently …