Ignore ratings agencies at your peril, says Mabuza

Deputy President David Mabuza says South Africa has no choice but to respond to concerns of the sovereign credit rating agencies and address the problems they identified, because potential investors take the reports of the agencies very seriously.

Mabuza also apologised to South Africans and business in general for the current load shedding by Eskom and the inconvenience it had caused to them, including those who were writing their final matric examinations.

Mabuza said the agencies assessed a country and public entities and gave opinion.

“Unfortunately, those who want to invest in this country will take those opinions seriously. You can ignore the advice of and opinion of the rating agencies at your peril, but it is important to respond,” Mabuza said.

The deputy president, replying to oral questions in the National Assembly yesterday, said the agencies had previously raised concerns about the state of affairs at state-owned enterprises (SOEs) and the country’s debt.

He said it was a fact the SOEs were not in a stable condition and the government had to respond to the situation.

“We must keep track and make them better,” he said.

Regarding the continuously increasing government foreign debt and the agencies’ concerns around it, government had to respond by cutting costs.

“That means we must slim down, we must make sure that we reprioritise, we curb wastages. We look at all of what we think we can bring down in the expenditure,” Mabuza said.

Responding mainly to a question raised by Economic Freedom Fighters MP Ringo Madlingozi about ensuring the country’s economy was put on the right path, Mabuza said there were certain fundamentals that it must do.

These included continuing with the skills and educational programmes so that more people were skilled and absorbed into the mainstream economy.

“We must tackle unemployment in order to tackle poverty. Those are the issues that are on our radar for us to get the country on the track,” Mabuza said.

Regarding load shedding, Mabuza said government was looking at the problems that had affected Eskom and he assured South Africans that such problems would be attended to and the situation returned to normality soon.