No time for politics now, save the economy and our country!
28 March 2020
Moody’s downgrade of South Africa’s sovereign credit rating to ‘Ba1’ from ‘Baa3’ is not unexpected. A perfect storm has been in the making for some time due to policy uncertainty, weak economic growth, rising debt levels, a decline in income to the fiscus and high levels of corruption and ineptness in government departments. The impact of the COVID-19 pandemic on the economy will cause further deterioration of not only the South African economy but the regional and global economy as well.
Moody’s is accurate in its observation that initiatives actioned by the state to implement structural reforms and initiatives aimed at firing up the economy did not have any meaningful effect.
The obsession to ‘save’ an ailing state-owned enterprise such as SAA and the haphazard approach to clamp down on poorly governed and managed state-owned enterprises are indicative of government’s inability and unwillingness to lay down the gauntlet and implement the required structural reforms.
The South African economy can no longer be held hostage by labour unions, political factions within the ruling party and ill-conceived government policies that cause more uncertainty and harm to the economy.