‘We need to talk about the credit rating’
BUSINESS leaders, academia and government are expected to attend an Economic Policy Dialogue on South Africa’s sovereign credit downgrade to sub-investment grade status on Friday.
The dialogue, hosted by the Trade and Industry Department, will be addressed by a panel of highly renowned economists, including head of Credit Rating Services at the Financial Services Board, Roland Cooper, Sovereign Analyst in the S&P emerging markets sovereign ratings team, Gardner Rusike, and the director of strategy and risk management in the asset and liability division at the National Treasury, Lebogang Madiba.
The dialogue comes a week after the Public Investment Corporation (PIC) said it believed that South Africa remained at risk of further credit rating downgrades, given sluggish growth and a lack of confidence in the economy.
Earlier this year, Fitch dropped the long-term local currency rating to junk status, while Moody’s and S&P Global have kept their ratings to one notch above that level.
The country’s economy entered recession for the first time since 2009 in the first quarter and is also struggling with high unemployment and credit ratings downgrades.
According to the Minister of Trade and Industry, Rob Davies, the Economic Policy Dialogue platform was established to advance the economic and public policy view of the dti on current economic affairs and matters.
“The dialogue is also a stakeholder engagement platform whereby the dti reaches out to its stakeholders and communicates its programmes.
“It also enables us as the department to be proactive in terms of challenging the narrative about SA’s economy from the angle of heterodox economic school of thought,” said Davies.
He said it was essential to have an informed discourse on the implications of the credit rating downgrade for South Africa, and together formulate ideas on how to respond effectively.
“This will enable us to collectively create an interventionist path that will potentially restore South Africa’s rating to above investment grade status,” he said.