Analysts said S&P’s decision, which came after Moody’s also held its Baa2 rating on Pretoria last month, was a nod to extensive firefighting efforts by Finance Minister Pravin Gordhan, reappointed in December to calm jittery markets after a previous stint in 2009-2014.

But they also said any policy slip-ups or political rhetoric that backs the rising speculation that Gordhan does not enjoy Zuma’s full support, could induce a downgrade by year-end.

“We still firmly believe that South Africa’s propensity to make policy mistakes, the lack of key reforms, and uncertainty in the economy mean that we are on a near inevitable path towards sub-investment grade,” Nomura analyst Peter Attard Montalto said.

“The politics just don’t allow National Treasury the space to be ‘good’ at growth-boosting reforms.”

Zuma has faced increasing opposition accusations of mismanaging the country ahead of key local government elections on Aug. 3.

He survived an April impeachment vote called by the opposition after the Constitutional Court said he breached the law by ignoring an order to repay state funds spent on renovating his home.

Source: MoneyWeb