Fitch Says South Africa’s Rating Reflects Eskom Debt Risk

Fitch Ratings Ltd. said that while South Africa’s worsening debt forecasts don’t include the threats posed by the state taking on any of the embattled power utility’s 450 billion rand ($30 billion) of debt, any risks posed by this are reflected in the nation’s current credit assessment, Bloomberg News reported. Finance Minister Tito Mboweni presented a rapidly deteriorating outlook in his medium-term budget policy statement on Wednesday, with gross government debt seen surging to 80.9% of gross domestic product in the 2028 fiscal year unless urgent action is taken. The trajectory is almost 20 percentage points higher than forecast in the February budget and shows no sign of stabilizing. Eskom Holdings SOC Ltd. isn’t generating enough income to cover interest payments on its debt and is struggling to produce enough power to meet demand. Read more