It is May 25. Only hours ago, S&P Global Ratings decided to keep South Africa’s sovereign credit rating unchanged. Two months earlier, Moody’s Corporation decided to retain South Africa at investment grade. Depending on your economic inclination, you may well consider these decisions delusional, not being a true reflection of South Africa’s prevailing economic reality.

Quite aptly, on that day, I was introduced to a psychiatric syndrome, folie à deux – French for ‘madness of two’ – whose symptoms are delusional belief and, in certain instances, hallucinations, which are transmitted from one person to another.

I discovered that there are extensions of the psychiatric syndrome, which, when shared by more than two people, is called folie à trois, folie à quatre, folie en famille, French for ‘family madness’, and folie à plusieurs (‘madness of several’). Just to remind you, ‘madness’ is the nonlegal word for ‘insanity’.

The third of the Big Three credit rating agencies, Fitch, has yet to make known its sovereign credit rating of South Africa. But, in line with the psychiatric syndrome, the logical expectation is that it will leave the rating unchanged.

It is indisputable that South Africa is still facing considerable economic challenges, even after what S&P Global Ratings calls “the recent political transition, [after which] authorities are pursuing key economic and social reforms”. Just how considerable the challenges are is, of course, another matter. S&P Global Ratings also believes that “South Africa’s economic growth remains tentative, and government’s debt burden continues on a rising path”.

Moody’s is more upbeat in its assessment, being of the opinion that the weakening of South Africa’s institutions will “gradually reverse under a more transparent and predictable policy framework”.

More worringly, however, is that both S&P Global Ratings and Moody’s are not concerned about the proposed expropriation of land without compensation. Quite surprisingly, S&P Global Ratings has opined that “it is still too early to tell how the process will unfold, but we expect that the rule of law, property rights and the enforcement of contracts will remain in place and will not significantly hamper investment in South Africa”. It did, however, say: “We could also consider lowering the rating if the rule of law, property rights or enforcement of contracts were to weaken, undermining the investment and economic outlook.”

Just how South Africa is going to consider its citizens’ interests, and do so in an equitable and a just manner, is, of course, another matter.

Then, perpetuating its upbeat assessment, S&P Global Ratings indicates that it “could also take a positive rating action if policymakers were to introduce structural economic reforms that delivered improved competitiveness and employment”. If this had to be set to music, Monty Python’s Always Look on the Bright Side of Life would suffice. I could even be so bold as to suggest an opening to this fable: “I knew that something very special was about to happen . . .”

What is also worrying is that the sovereign credit rating agencies are evidently intent on basing their assessment on a most unlikely, optimistic economic future rather than taking into account the prevailing realities and the challenges facing South Africa. They also lack the honesty to acknowledge that the Presidential change was just that – a Presidential change. The usual suspects, with the odd exception, remain in government.

It is as if the rating agencies are walking on eggshells, taking great care not to touch Humpty Dumpty. Far-fetched? Consider that 40% of the South African government’s rand-denominated debt (read ‘bonds’) is held by foreigners or international institutions. If South Africa drops another credit rating notch, its bonds will fall out of Citigroup’s World Government Bond Index‚ which would prompt the large international tracker funds to sell out of their holdings of such bonds. Whose interests are being protected?

If a bond sell-off is triggered, you do not have to be an economist to know what would result. A hint: It’s bad. Very bad.