JOHANNESBURG – Opposition parties and business organisations say a further downgrade by Standard & Poor’s Global and a review by Moody’s was to be expected, citing political uncertainty as the core problem.
S&P global has South Africa firmly in junk status.
Government has responded to the announcements, saying it will do what it can to take the country out of junk status.
Business Leadership South Africa’s Busi Mavuso says many economic and political problems that South Africans experience are rooted in corruption, state capture and political patronage, resulting in a trust deficit between government and investors.
She says the mismanagement of state-owned enterprises adds to the crisis.
“We need to address the leadership and balance sheets of state-owned enterprises.”
Democratic Alliance leader Mmusi Maimane has called for unity to address the problem.
“How do we rally together across political lines? We need to do whatever we can to salvage the situation to prevent further downgrades.”
In a statement issued on Saturday, the party described the ratings downgrade as a “vote of no confidence in the Presidential Fiscal Committee”.
“Minister of Finance Malusi Gigaba’s strategy to delay the hard decisions necessary to hold the fiscal line and allow the budget to ‘blowout’ with national debt ballooning to R3.4 trillion, or 60% of GDP, in 2020/21 has backfired.
“The major ratings agencies, which used to give us the benefit of the doubt, have finally lost patience. What this means is that Standard & Poor’s have effectively dialed back their “ratings clock” by 23 years and downgraded South Africa’s sovereign credit rating to ‘junk status’.”
African National Congress treasure general Zweli Mkhize says the party needs to look at ways to stabilise policies and regain investor confidence, to get the country to emerge from junk status.
Nedbank, one of South Africa’s major banks, has urged government to change the outlook of the economy through decisive action to prevent further downgrades in 2018.
Pelane Phakgadi / EWN
(Edited by Shimoney Regter)