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Cosatu ‘worried’ over junk status

Economy

Johannesburg - Cosatu says it's worried about S&P Global's decision to downgrade the country to junk status as this would affect crucial spending across the economy. 

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Cosatu general secretary Bheki Ntshalintshali Picture: Bhekikhaya Mabaso

The federation said on Tuesday following its special central executive committee meeting  that it was worried that the government owed more than R2.2 trillion to lenders which was more than 50, 7 percent of the national income. 

It was also worried that the government was also paying R160 billion in interest, which was closer to the amount it pays out in social grants. 

Cosatu's Bheki Ntshalintshali expressed disapproval in the reason given by S&P to downgrade the country. 

S&P Global said its decision was prompted by the President Jacob Zuma's decision to reshuffle his cabinet last week, which included firing Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas. 

It cited political and policy uncertainty as a reason for the decision to downgrade the country's sovereignty to junk status. 

 Another rating agency Moody's has also put the country’s economy under review for a downgrade, with Fitch expected to make its decision later this week. 

Read also: Moody's places SA on review

"We express our disapproval of the credit rating agency S&P's decision to downgrade the country and we view their reasons about political uncertainty as interference in our domestic political affairs," said Ntshalintshali. 

"We also hold responsible and culpable the President Jacob Zuma because it is his inattentive and negligent leadership and disruptive actions that have emboldened these agencies to interfere in this country's political affairs," Ntshalintshali said. 

Cosatu President Sdumo Dlamini lashed out at rating agencies and accused them of meddling in the country's affairs. 

Although Cosatu would not comment on whether it was right for Zuma to fire Gordhan, the federation has called for Zuma to step down. 

The ANC's alliance partner said it no longer had confidence in his leadership, joining the SACP's in its demands for the same. 

Dlamini said Zuma has contacted him and asked to meet with Cosatu's leadership. 

@ZintleMahlati.

POLITICS AND DEVELOPMENT BUREAU

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