By S’thembile Cele
South Africa’s latest budget painted an encouraging picture of improving public finances, according to Moody’s Ratings, while cautioning that “meaningful” debt reduction will require stronger economic growth.
The budget “confirms South Africa’s strong fiscal performance, underpinned by broad-based revenue growth, and points to improving fiscal prospects,” said Evan Wohlmann, vice president-senior credit officer at Moody’s.
Finance Minister Enoch Godongwana’s annual budget presentation on Wednesday showed debt and debt-service costs peaking this year and then declining, helped by surging precious-metals prices that have boosted government revenue.
The rand and government bonds rallied.
In his speech to lawmakers in Cape Town, the minister said the world had taken note, citing S&P Global Ratings’ decision in November to grant South Africa its first upgrade in two decades.
That lifted S&P’s assessment to BB from BB-minus and also put it on a positive outlook, which South African officials said was as good
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