JOHANNESBURG – Democratic Alliance (DA) leader Mmusi Maimane says parties and organisations need to work together to constitute a new government which will upgrade South Africa to an investor friendly country.
Maimane’s comments come after a decision by Standard and Poor’s Global to downgrade South Africa’s local currency debt to “junk” territory.
“We’ve got great business people and we’ve got great public servants. I think we bring all those people together, we can fight this battle of ensuring that we turn the tide of South Africa’s investment grade.”
The ratings agency cited a further deterioration in the country’s economic outlook and public finances.
The agency has lowered the country’s long-term local currency credit rating to BB+ from BBB-, moving it into sub-investment grade.
This means both its ratings are now in junk state status with the foreign currency rating two notches below junk.
However, the outlook on both now stands at stable.
Business Leadership South Africa (BLSA) says S&P Global’s announcement is a setback.
It’s also noted Moody’s placing the country on review for a downgrade.
The organisation believes that this will deliver yet another blow to an already weakened economy and negatively impact the everyday lives of millions of South Africans.
The two agencies made their announcements at around midnight.
BLSA says business and investor confidence in South Africa is already at a 30-year low and this will only deepen it.
In a statement, BLSA CEO Bonang Mohale put blame on the government, saying the current administration seems to derive joy at scoring own goals.
He says many economic and political problems South Africans experience are rooted in corruption, state capture and political patronage resulting in a trust deficit.
Mohale says the two Cabinet reshuffles, mixed messages around nuclear capability, poor numbers and a lack of direction in the medium-term budget policy statement and most recently the resignation of Michael Sachs at National Treasury have all sent a message of instability and lack of clarity to the ratings agencies.
He says the current situation in the country was avoidable.