Analysts participating in the ECR survey downgraded South Africa’s ECR risk score by 0.3 points, to 55.9 points (out of a possible 100) in August, leaving Botswana in top spot in ECR’s Africa risk rankings.
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South Africa’s score declined because of lower scores in the survey’s economic outlook, monetary/currency stability and regulatory/policy environment indicators, As a result it has fallen two places in the global rankings.
With a global rank of 51, South Africa now sits one place below Botswana in the survey. Botswana benefits from higher scores in the survey’s economic, political, debt and credit rating indicators than South Africa's (see graph below).
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Botswana's improving fundamentals have led it to climb 30 places since March 2010; South Africa has fallen three places over the same period.
Rising revenues and strict spending controls helped reduce the Botswana government’s gross debt from 14.9% of GDP in 2011 to 13.4% in 2012 and produced a fiscal surplus of 4.9% of GDP in 2012.
A recent report by Standard & Poor’s recognized Botswana’s fiscal position as an underlying credit strength but warned that a fall in the diamond price might result in a weaker than expected current account and expose the economy to external shocks.
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