South Africa is not ‘junk’, says new rating agency

The new Gauteng-based agency, Sovereign Africa Ratings , launched its inaugural review of the country this week, aiming to provide an additional opinion on South Africa’s creditworthiness compared to the ‘big three’ agencies – Fitch Ratings, S&P Global and Moody’s Investors Service – which make up 95% of the sector.that different African economies are at various levels of industrialisation or digitisation – thus the ‘one-size-fits-all’ evaluation used by global agencies cannot be applied.

“It is our obligation as credit rating agencies to note that we cannot, as we did in the late 1800s or 1900s, say that we serve the interest only of the issuers because we are affecting business, we are affecting sovereigns, we are affecting individuals. Therefore the broader accountability of sovereigns needs to be explored,” said Falala., Zwelibanzi Maziya, SAR chief operating officer, said that the ‘big three’ agencies have all given South Africa similar ratings.

“African leaders have shown dissatisfaction with the methodologies used by legacy rating agencies. The SAR’s methodology of rating is unique in that it emphasises additional metrics. Our methodology focuses on all traditional rates used by other agencies, but in addition, the structural framework of a country and its resource endowment,” said Maziya.“So far, we rated South Africa as triple B in the long term – meaning it’s not junk.

Source: News Formal (newsformal.com)

Maybe a much better informed person than myself, i.e MagnusHeystek could let me know if this new rating agency will or can influence international views on our economy. I am worried that this might be smoke and mirrors. If I am wrong then so be it, but an inaugural rating only?

Great news but does this rating agency carry any muscle in the global economy? How many investors will even read this, apart from some locals?

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