South Africa ratings and outlook not immediately affected by political transition

On Feb.14, 2018, South Africa's president, Jacob Zuma, resigned, and today Deputy President Cyril Ramaphosa was formally sworn in as president. This follows the African National Congress' (ANC's) elective conference in December 2017, in which Mr. Ramaphosa was chosen as the new ANC party leader.

In our last report, "South Africa Ratings Lowered On Weakening Economic And Fiscal Trajectory; Outlook Stable," published Nov. 24, 2017, on RatingsDirect,we indicated that South Africa was facing many economic challenges.

The new leadership could bring confidence and faster implementation of key reforms already undertaken.

However, Mr.Ramaphosa and his administration will require time to design and implement measures to improve economic growth and stabilize public finances, given the structural and institutional challenges that South Africa faces.

Economic growth remains low, impeding the path to fiscal consolidation. Wethink the government will attempt to introduce offsetting measures in aneffort to improve budgetary outcomes, but these may not be sufficient to stabilize public finances in the near term.

We have determined, based solely on the developments described herein, that no rating actions are currently warranted.

Only a rating committee may determine a rating action and, as these developments were not viewed as material to the ratings, neither they nor this report were reviewed by a rating committee.