SA is not alone, Africa has a plethora of countries that have junk status, here’s the list…

South Africa is among a plethora of countries on the continent whose long-term foreign currency credit rating is rated junk by S&P Global Ratings whilst Botswana is the only country with a very strong investment grade. According to the table below, the majority of country’s on the continent rated by the organisation are rated at junk making the cost of borrowing excessive. S&P’s ratings express its opinion about the ability and willingness of a government, to meet its financial obligations in full and on time.

The agency states that “credit ratings can also speak to the credit quality of an individual debt issue, such as a corporate or municipal bond, and the relative likelihood that the issue may default”.

S&P describes those with an:

  • A investment grade as “having a very strong capacity to meet their financial commitments but somewhat susceptible to adverse economic conditions and changes in circumstances”.
  • BBB – adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
  • BB speculative grade – less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
  • B speculative grade – more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.
  • D – speculative grade, payment default on a financial commitment or breach of an imputed promise, also used when a bankruptcy petition has been filed or similar action taken.
CountryRatingOutlookDate
 AlgeriaNot rated
 AngolaBNegative2016/08/12
 BeninNot rated2013/11/01
 BotswanaA-Negative2016/04/29
 Burkina FasoB-Positive2016/05/27
 BurundiNot rated
 CameroonBStable2012/02/20
 Central African RepublicNot rated
 ChadNot rated
 Congo, D. R.B-Negative2016/02/05
 Congo, RepublicB-Stable2016/08/09
 DjiboutiNot rated
 EgyptB-Stable2016/11/11
 Equatorial GuineaNot rated
 EritreaNot rated
 EthiopiaBStable2014/05/09
 GambiaNot rated
 GhanaB-Stable2014/10/24
 GuineaNot rated
 Guinea-BissauNot rated
 KenyaB+/BStable2017/04/07
 LiberiaNot rated
 LibyaNot rated2011/03/10
 MadagascarNot rated2009/05/11
 MalawiNot rated
 MaliNot rated2008/07/03
 MauritiusNot rated
 MoroccoBBB-Stable2014/05/16
 MozambiqueSD2017/04/06
 NamibiaNot rated
 NigerNot rated
 NigeriaBStable2016/09/16
 RwandaBStable2016/09/09
 São Tomé and PríncipeNot rated
 SenegalB+Stable2013/07/05
 SeychellesNot rated2009/08/17
 Sierra LeoneNot rated
 SomaliaNot rated
 South AfricaBB+Negative2017/04/03
 South SudanNot rated
 SudanNot rated
 SwazilandNot rated
 TanzaniaNot rated
 TogoNot rated
 TunisiaNot rated2013/12/18
 UgandaBStable2014/01/17
 ZambiaBNegative2016/03/18
 ZimbabweNot rated

Source: Wikipedia 

 

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