Zuma shrugs off blame for credit ratings dives
PRESIDENT Jacob Zuma has scoffed at suggestions that he should personally be held responsible for the country’s recent credit rating downgrades, saying that most countries had suffered the same fate.
An unperturbed Zuma said countries downgraded to junk status managed to get their economy back on track. He told MPs yesterday that the economy would pick up, despite the recent downgrades by ratings agencies.
South Africa sank into recession for the first time in eight years in the first quarter, worsening an ailing economy that has seen the country shed jobs and suffer rising food prices.
There was no need to panic, Zuma said yesterday. He said South Africa must take a leaf from countries in Europe and elsewhere that had managed to rebound from downgrades.
Opposition MPs put the blame for the downgrades by Standard & Poor’s and Fitch squarely on Zuma, with Mmusi Maimane of the DA and Deidre Carter of Cope saying he must take responsibility.
Zuma said MPs must learn to deal with facts and not assume that he can be held responsible for the downgrades. “I am not sure how much members appreciate the global situation, particularly the ratings.
“There are a number of countries that have been downgraded. I am not sure what happened in those countries, whether it was a leader or the economy,” he said.
He said he could not be singled out and accused of causing the downgrades because they happened for various factors.
Zuma has been under fire since his cabinet reshuffle in March, when he axed former finance minister Pravin Gordhan and his deputy Mcebisi Jonas.
Gordhan was on an investor roadshow in London in March when he was called by Zuma to come back before being fired a few days later.
This led two ratings agencies, Standard & Poor’s and Fitch, to downgrade South Africa to junk status.
Moody’s postponed its announcement for three months until it released its decision two weeks ago, when it also downgraded South Africa.
MPs also raised concern about the recent figures from Statistics South Africa on the increase in unemployment to 27.7% and the contraction in the economy, pushing the country into a recession.
The country had two consecutive negative growth spells in the last quarter of 2016 and the first of the year, which led to a technical recession.
Zuma said the government was doing all it could to get the economy back on track. He said he had met with the economics cluster this week on plans to reignite growth in the economy.
He said the drought did not help as it had also contributed to the poor economic growth.