This is according to Busisiwe Mavuso, the chief executive officer (CEO) of Business Leadership South Africa. She tells the OFM Business Hour that Standard and Poor’s (S&P’s) decision to revise South Africa’s credit-rating to positive from stable is attributed to what the agency calls “favourable terms of trade”. 

According to Mavuso, these include the commodities boom and critical structural reforms to power generation and the telecommunications sector. This came in the form of government raising the threshold for self-generation facilities to 100 MW, and the recently held spectrum auction which resulted in the Independent Communications Authority of South Africa (Icasa) raising R 14,4 billion from the fraught process on 10 March 2022 amidst pending legal challenges.

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The Eskom board member further adds that credit ratings agencies look at the strength of a country’s fiscus in withstanding global risk, like the ongoing Russia/Ukraine war. The agencies place these countries in certain brackets to gauge how they fare in the global space. She says these reports are important because they dictate the flow of investment into a country. “The only way we can get out of soaring unemployment and slow economic growth is via investment,” concludes Mavuso.

When questioned on the stability of Eskom, she first explains that she is a non-executive member of the Board and is of the view that the utility’s management led by CEO André de Ruyter are doing an excellent job at being transparent about the issues at the utility. She says she remains aligned with Eskom’s management and with their communication with the public on the issues affecting the utility.

OFM