Most vulnerable could bear brunt of ructions
What the country’s junk status credit rating means for NGOs
WE AT the Community Chest have taken note of the recent cabinet reshuffle announced by President Jacob Zuma last week and more recently the downgrade of South Africa’s long-term foreign currency sovereign rating to sub-investment grade or junk status by S&P Global.
The Community Chest is concerned about the negative effects this has on the poor, as any increase to the cost of our currency results in higher debt repayment fees, higher food and transport costs, as well as an increase in inflation and long-term unemployment.
While we fully recognise the constitutional prerogative of the president to decide on the members of cabinet, we note with alarm that these appointments are being made at a time of great division in our body politic as well as at a time of great concern over the state of the economy.
All the information provided to the public about this cabinet reshuffle suggests it was not made with the best interest of South Africa in mind and that it will have an adverse effect on the fiscal stability, economic welfare and the overall development of our country. It also comes across as a highly divisive set of decisions, which does not seek to build the sense of national unity we so desperately need at this stage.
While seeking to believe that the best of intentions are behind this reshuffle, statements made by leading politicians and economists have indicated it will diminish the ability of the government to execute its social mandate, and will reduce trust in the legitimacy of key democratic institutions.
We are further concerned the frequent retiring and hiring of ministers adds increased financial burden to the government salary costs, benefits cost and pension payments – all this at a time when all of us are asked to be fiscally prudent.
In addition, it appears ministers who have a public track record of bad corporate governance seem to have been retained, while ministers who have worked extremely hard to secure the country’s fiscal well-being have been targeted in the reshuffle.
What does this mean for NGOs? As it is, it is hard to raise money for the important work being done in this environment and economy. It further means that, within these restrictive economic conditions, NGOs will have an increase of encounters with people and communities who have been adversely affected by this current crisis. And that implies additional costs to already struggling NGOs.
Notwithstanding, the Community Chest remains resolute in its commitment to help build the South Africa that came into being in 1994.
The commitment is to serve the vision of helping to build a just, free, equal, well-governed and prosperous society. We will continue to serve the development needs of the people and with our donor partners will seek to do only that which is in the best interest of securing such a society.
We remain fully committed to use our resources and skills in service of reducing inequalities, addressing poverty, and creating an entrepreneurial mindset toward job creation. We recognise the vital importance of a country with a fully inclusive economy.
We call on the government to lead with integrity and wisdom and to provide the citizens of this land with a secure and prosperous future in which they can live out their personal and global aspirations.
We remain committed to the ideals contained in the constitution and to the well-being of all its people. We call on the government to provide leadership that will realise the enormous potential of our country.