JOHANNESBURG - South African President Cyril Ramaphosa's multi-billion-dollar plan to turn around the country's economy will do little to improve its sluggish growth, ratings agency Fitch said on Tuesday.
"South Africa's latest economic plan is unlikely to deliver a significant boost to economic growth," said Fitch, which rates Pretoria's foreign and local currency debt as sub-investment, adding that the rand's recent plunge would also hinder the plan.
Ramaphosa, who clinched the leadership of the ruling African National Congress in December on a pledge to revive the economy and clean out government corruption, said R50 billion ($3.5 billion) of "reprioritised expenditure and new project-level funding" would be the core element of the plan.
He also said government would open a R400 billion infrastructure fund and ease visa restrictions rules that have hobbled the tourism sector - a key source of foreign exchange earnings and low-skilled jobs.
"The plan does include measures that could support growth, but many relate to long-standing policy ideas that have been slow to implement," Fitch said of the plan announced by Ramaphosa on Friday to pull the economy out of recession.
Last Friday, Fitch reduced its 2018 and 2019 growth forecasts for South Africa to 0.7 percent and 2.1 percent, from 1.7 percent and 2.4 percent previously.
"Balancing growth promotion, pressure to address exceptionally high inequality and fiscal consolidation priorities could be challenging if growth does not recover," Fitch said.