The Editorial Team |

South Africa’s credit rating downgraded to junk by S&P after finmin changed

JOHANNESBURG (Capital Markets in Africa) – S&P Global Ratings downgraded South Africa’s sovereign credit rating to BB+ from BBB- grade on Monday, saying the recent firing of its internationally respected finance minister posed a risk fiscal policy. The rand fell by as much 2 percent to the dollar in response to the news of the downgrade, while government bonds also weakened sharply. “The downgrade reflects our view that the divisions in the ANC-led government that…

South African Assets Tumble as Gloom Pervades Fiscal Outlook

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JOHANNESBURG (Capital Markets in Africa) – South African bank stocks tumbled and bonds plunged as the rand headed for its biggest weekly slide since 2015 after the firing of Finance Minister Pravin Gordhan raised concerns about the country’s fiscal path and its investment-grade credit rating. The rand dropped as much as 2.6 percent before paring the decline to trade 0.9 percent weaker at 13.3995 per dollar by 5:15 p.m. in Johannesburg, heading for a seven-week low. Benchmark…

Opinions on Removal of South Africa’s Finance Minister Gordhan

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JOHANNESBURG (Capital Markets in Africa) – Financiers, economists, labor leaders, lawmakers and officials from the ruling African National Congress are all having their say on how the decision by South African President Jacob Zuma to fire Finance Minister Pravin Gordhan and other cabinet members will affect the economy, the country’s credit ratings, bonds and the local currency. Colin Coleman, head of sub-Saharan Africa at Goldman Sachs Group Inc, tells Bloomberg TV: The cabinet reshuffle “removes the belt and braces over…

Fitch: South Africa Cabinet Reshuffle Signals Policy Change

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JOHANNESBURG (Capital Markets in Africa) – South African president Jacob Zuma’s cabinet reshuffle signals a change in policy direction and will raise political tensions within the ANC and its traditional allies, potentially weakening public finances and standards of governance, Fitch Ratings says. The president announced that the new cabinet, in which he has replaced finance minister Pravin Gordhan with Malusi Gigaba, will work towards “radical socio-economic transformation.” In his February State of the Nation speech,…

IMF Urges Nigeria to Start Belt Tightening, Cut Naira Curbs

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LAGOA (Capital Markets in Africa) – Nigeria should remove currency-trading restrictions and reduce its budget deficit and debt-service costs to “sustainable” levels, the International Monetary Fund said. “Stronger macroeconomic policies are urgently needed to rebuild confidence and foster an economic recovery,” the Washington-based lender said in a report Thursday after a team visited Nigeria. There’s a “need for a front-loaded, revenue-based fiscal consolidation starting in 2017, to reduce the federal government interest-payments-to-revenue ratio to sustainable levels.” The…

Zuma’s Night of Long Knives Risks ANC Split, Credit Rating

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JOHANNESBURG (Capital Markets in Africa) – South African President Jacob Zuma fired Finance Minister Pravin Gordhan and made sweeping changes to his administration in a high-stakes power play that may threaten his own presidency and place the nation’s investment-grade credit rating at risk. Zuma replaced Gordhan, with whom he feuded over state finances, with Home Affairs Minister Malusi Gigaba, who has no financial or business experience. He also named lawmaker Sfiso Buthelezi to take over from Mcebisi Jonas as deputy finance minister. The…

Kenyan Inflation Jumps to Five-Year High as Drought Bites

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NAIROBI (Capital Markets in Africa) -Kenya’s annual inflation rate accelerated to its highest level in almost five years as an ongoing drought compounds price pressures. Consumer prices surged 10.3 percent in March from 9 percent in February, the Kenya National Bureau of Statistics said in a statement emailed from the capital, Nairobi, when they broke through the Central Bank of Kenya’s 7.5 percent ceiling. The rate is the highest since June 2012 when inflation registered at…

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