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Moody’s Cuts South Africa’s Sovereign Credit Rating by One Level

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Sept. 27 (Bloomberg) -- South Africa’s sovereign-credit rating was cut one level to Baa1 by Moody’s Investors Service, citing the government’s inability to deal with economic and political challenges.

The rating was lowered from A3, Moody’s said in an e-mailed statement today.

“The revision reflects Moody’s view of the South African authorities’ reduced capacity to handle the current political and economic situation and to implement effective strategies that could place the economy on a path to faster and more inclusive growth,” the ratings company said in a statement.

The downgrade comes after six weeks of labor unrest that’s left at least 46 people dead and shut mines owned by Lonmin Plc, Anglo American Platinum Ltd. and AngloGold Ashanti Ltd. Growth in Africa’s biggest economy is also under pressure as a debt crisis in Europe cuts export demand from a region that buys about a third of South Africa’s manufactured goods.

South Africa’s jobless rate of 25 percent is the highest of more than 60 nations tracked by Bloomberg.

Jabulani Sikhakhane, spokesman for the National Treasury, declined to comment until a statement was published by the government.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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