The policy platform of the African National Congress (ANC) looks more investor and business friendly than had generally been anticipated ahead of its elective conference in Mangaung this week, rating agency Moody’s Investors Service said on Friday.
But it cautioned that some important decisions at the conference, which ended on Thursday, were not public or specific enough for Moody’s to assess fully.
“Moody’s therefore reserves judgment on how the conference decisions will affect South Africa’s Baa1 sovereign rating and negative outlook until there is greater clarity on some of these details,” Moody’s vice-president Kristin Lindow said in a statement.
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In particular, questions remained about how proposed changes to mining taxes would operate in practice, and how already struggling mining operations and investments might be affected, she said.
Moody’s downgraded South Africa’s sovereign rating in September and its comments on Friday suggest that the chances of a further rating downgrade may have been lessened as a result of the policy stance taken by the ANC at Mangaung.
The ANC ditched the concept of "strategic nationalisation" in favour of "strategic state ownership" in the mining sector through equity, using the state-owned mining company as its vehicle.
The party also focused heavily on the government’s National Development Plan (NDP) released early this year, which is seen by business as a positive blueprint aimed at boosting growth and reducing unemployment.
"In our view, the NDP contains a thorough analysis of the socioeconomic challenges facing the country," Ms Lindow said.
"We therefore see the ANC’s broad support for the NDP — going all the way up to the top echelons of the party — as credit positive."