INTERNATIONAL RATING AGENCY FITCH SEEN RAISING SOUTH AFRICA’S LAND ISSUE IN LATEST REVIEW

JOHANNESBURG, South Africa’s land redistribution debate will likely be among the key concerns raised by international rating agency Fitch when it issues its latest periodic review on South Africa on Friday, says Nedbank Chief Economist Dennis Dykes.

The government’s land repossession without compensation programme and structural issues in the economy will likely be highlighted in the review, he said here Thursday. While the land issue debate is being handled carefully by the government, it does contribute to delays in investment decisions, he added.

Speaking on the sidelines of the NedGroup’s Treasurers’ conference, Dykes said Fitch would likely keep the country’s ratings unchanged.

The agency affirmed the country’s rating at BB with a stable outlook in November. Economists say the rating agency will most likely acknowledge positive policy developments and the improved outlook under the country’s new leadership.

Stanlib Chief Economist Kevin Lings said: The first quarter GDP was weak, but they are a number of other positives that referred to, the fact that the budget in February was much better, the fact that Government is making significant changes at the State-owed Enterprise companies.

“I think that will improve the state of finances broadly. I think Fitch will be concerned about the land expropriation without compensation. I don’t think it’s enough to reside in any change in the credit ratings. So I’m expecting the credit rating to remain unchanged.

Source: NAM NEW NETWORK

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