The rating agency Standard & Poor’s (S&P) downgraded South Africa's credit rating to sub investment grade, commonly known as junk status.
The agency stated political instability and changes made to the executive leadership of the country as high risk to economic growth and sustainability.
Nic Borain, political and investment analyst at BNP Paribas SA says a downgrade was somehow expected after a Cabinet reshuffle by President Zuma.
S&P made quite clear last year that they wouldn't wait for a routine announcement if there was a cabinet reshuffle.— Nic Borain, Political and investment analyst at BNP Paribas SA
It is important to understand that over time government finances are going to be less available for spending on upliftment and transformation and more is going to be put into paying off our debts.— Nic Borain, Political and investment analyst at BNP Paribas SA
The people that are mandated to monitor us are worried that changes at treasury are not motivated by good governance... and that is a real scare.— Nic Borain, Political and investment analyst at BNP Paribas SA
Listen below to hear more of this interview: