South Africa is losing its status as the preferred investment destination. According to the latest release from Moody’s Investors Service, South Africa's government bond rating was downgraded by one notch to Baa1 from A3. The foreign currency rating for South Africa and the ceiling for long-term deposits were lowered from А1 to А2 and from А3 to Ваа1, respectively. The rating outlook remains negative. The main issue, according to the experts, is the lack of confidence in the government’s ability to implement reforms and to make effective decisions about economic growth and the country's situation stabilising. An additional negative effect was made by the decrease of investments and international capital flows. “If the government's debt rises much further and the sociopolitical situation stays destabilized, Moody’s can downgrade RSA ratings again”, the report reads. Moody’s put forward the following key reasons: “The increase of socioeconomic stresses, diminished capacity of the government to manage risks, deterioration in the government's debt metrics, high unemployment and concerns about the country's future political stability”. All these facts are raising concerns about the economic and social prospects of South Africa. The country's economy took a sharp downward trend coming from the protest actions and mass strikes in the platinum mines, the demonstrations have moved to the gold mines already. That results in a decrease of South Africa's gold production by 39%.
