S&P has downgraded South Africa to junk status, noting that President Zuma has put at risk South Africa's fiscal and growth outcomes with his Cabinet changes.
• In our opinion, the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.
• We assess that contingent liabilities to the state are rising.
• We are therefore lowering our long-term foreign currency sovereign credit rating on the Republic of South Africa to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB'.
• The negative outlook reflects our view that political risks will remain elevated this year, and that policy shifts are likely, which could undermine fiscal and economic growth outcomes more than we currently project.