SA dodges downgrade bullet again
SOUTH Africa has again escaped by the skin of its teeth a credit downgrade after Standard & Poor’s (S&P’s) left the country’s credit rating unchanged at the negative outlook in its review yesterday.
This has given the country another 6-month breather to fix the state of the economy and ease political tensions.
S&P’s rating followed Fitch and Moody’s, which have all kept South Africa one notch above the sub-investment grade.
South Africa’s escape yesterday came as the Treasury said earlier it had done all the right things to avoid a downgrade.
This has been one of the toughest weeks for the country as it held its breath ahead of S&P’s rating.
The three rating agencies last conducted their reviews in June when they warned the government to implement structural reforms in the economy.
The infighting in the ANC has been blamed for some of the decisions of the rating decisions.
But last week ANC spokesperson Zizi Kodwa dismissed this saying the conference of the ANC this month has no bearing on the economy.
He said the conference came every five years and the party was not destabilising the economy, with people contesting positions in the party. Six candidates including Deputy President Cyril Ramaphosa and Speaker and ANC national chairperson Baleka Mbete have been touted to succeed President Jacob Zuma.
But Zuma’s camp in the ANC wants former minister and outgoing chairperson of the AU Commission Nkosazana Dlamini Zuma to succeed him.
Finance Minister Pravin Gordhan had credited the work of business and labour to fix the economy. Early in the year Zuma appointed a team led by Gordhan and Telkom chairperson Jabu Mabuza to reignite growth in the economy.
Growth projections for this year have been revised to less than 1 percent.
The lack of growth in the economy is one of the serious concerns raised by the rating agencies.
They will conduct another review in June next year, and the next six months will be crucial for South Africa to get things right.