The news that South Africa's sovereign rating has been downgraded caught many by surprise. But it was long coming. The main reason for the rating agency's decision is clearly concerns about political leadership in the country. Moody's, which is expected to follow suit, has said as much, stating its decision to put the country on a negative outlook down to "the abrupt change in leadership of key government institutions".
The downgrade by S&P comes on the back of a highly charged political environment in the ruling African National Congress. This culminated in the sacking of the finance minister Pravin Gordhan and his replacement with Malusi Gigaba. While the cabinet reshuffle is the proximate cause of the downgrade, South Africa's political and institutional malaise goes deeper.
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