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Industry Research: South Africa
Credit Spotlight: Civil Unrest and Ratings in South Africa
GCR Ratings has taken note of the recent geopolitical events from 7 July 2021 which sparked violent looting and riots in Kwa-Zulu Natal and Gauteng amongst others. Although these events were sudden and resulted in significant losses to property and lives, it is considered to have a limited impact on the broader credit risk profile of the country and our issue(r) credit ratings in South Africa at the moment.
The Country Risk Score for South Africa remains unchanged by the violence, although negative pressure on the score has increased. However, should the country slip in terms of security and political stability, it could change the institutional score or lead to a downwards adjustment in the overall country risk score. Furthermore, we believe that the risk of fiscal slippage by the government could be higher than previously judged as the country attempts to compensate for high income inequalities.