Sweech

Hassle-FREE Online Campaigns On Sweech

Moody’s downgrades is a sign

Comment on this story


Moodys

REUTERS

Moodys.

In the past few days there has been a flurry of negative sentiments relating to the South African economy. On September 27, Moody’s downgraded the government bond rating by one notch to Baa1 from A3. Their rating outlook remains negative. Then on October 1, the rating of the five metros of Cape Town, Ekurhuleni, Johannesburg, Nelson Mandela Bay (Port Elizabeth) and Tshwane (Pretoria) along with 12 municipalities were downgraded.

But the SA National Road Agency Limited’s (Sanral) rating remained the same. Moody’s decision to affirm Sanral’s ratings, notwithstanding the sovereign downgrade, “reflects eased concerns over the company’s financial prospects following the recent Constitutional Court decision to lift the embargo on e-tolling operations on the country’s largest toll road project, the Gauteng Freeway Improvement Project (GFIP)”.

On the same day, Moody’s downgraded the senior unsecured bond rating of Eskom by one notch to Baa3 from Baa2. The outlook on the rating remains negative.

On October 4, the downgrading continued with the foreign-currency long-term issuer ratings of two rated development finance institutions, the Development Bank of Southern Africa and Industrial Development Corporation, declining. The negative outlook was maintained on both institutions’ issuer ratings, in line with the outlook on the government bond rating.

On the same day again, we saw the foreign-currency long-term deposit ratings of the five largest local banks being downgraded to Baa1 from A3, due to the revision of the country’s foreign currency deposit ceiling to Baa1 from A3 previously.

Moody’s says these negative outlooks reflect that of the government rating, which signals further downside risks in the operating environment, as well as in the government’s capacity to provide systemic support to the banking system.

So what has caused all these downgrades and the likely downgrades that are coming? Moody’s says: “The main driver for the downgrade of South Africa’s ratings is Moody’s lowered assessment of institutional strength from ‘high’ to ‘moderate’, an important factor in the rating agency’s judgment of a sovereign’s economic resiliency. The revision reflects Moody’s view of the South African authorities’ reduced capacity to handle the current political and economic situation and to implement effective strategies that could place the economy on a path to faster and more inclusive growth.”

This is quite telling of the impact that the current political climate and the economic capabilities of certain people in the civil service has on the country’s outlook. The salaries of civil servants were increased recently, but Moody’s notes that productivity levels did not increase in line with this. They also note that, “the rise in the wage bill and debt servicing costs reduces the amount of resources available for development spending”. The developmental state aspirations are at risk.

The third driver informing Moody’s decision to downgrade the sovereign rating is the more negative investment climate, which has been aggravated in recent years by shortfalls in energy, transportation and other infrastructure, as well as high labour costs relative to productivity.

Overall the rating outlook remains negative in Moody’s view “because of uncertainty as to whether the policy decisions being devised ahead of the December leadership conference of the ANC will be helpful or detrimental to the country’s growth and competitiveness outlook”.

The impact of this is quite immense, because the state’s credit ratings affect all institutions below it in both the private and the public sector.

So what could change the ratings according to Moody’s? Higher domestic savings and investment rates would support a stable outlook as would sustainably stronger growth, restrained debt accumulation and the maintenance of sound economic policies by the current administration and its successors.

The reality of these outcomes happening soon is not likely, so a long-term approach in fixing things has to be taken. The ratings could be downgraded should the government’s debt and contingent liabilities rise further, particularly if the deterioration occurs due to a pro-cyclical fiscal stance and/or heightened socio-political unrest that is not addressed in a manner consistent with future debt sustainability.

The bottom line is: there is no factual and hard economic data that informs the ratings downgrade but leadership and political issues. This points to a lack of leadership on all sides in addressing the issues driving the creditworthiness of the country. How long can this go on before the imminent financial implosion of South Africa?


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks
JustLooking69
I'm a 56 year old woman looking to meet men between the ages of 50 and 60.
View Profile
Belind4_M
I'm a 19 year old woman looking to meet men between the ages of 19 and 30.
View Profile
AGX
I'm a 36 year old woman looking to meet men between the ages of 35 and 44.
View Profile
Ldp123
I'm a 43 year old woman looking to meet men between the ages of 44 and 58.
View Profile
veldmuis007
I'm a 33 year old woman looking to meet men between the ages of 28 and 35.
View Profile
00butterflygirl00
I'm a 30 year old woman looking to meet men between the ages of 28 and 36.
View Profile
Marianda
I'm a 25 year old woman looking to meet men between the ages of 25 and 30.
View Profile
Lady66
I'm a 48 year old woman looking to meet men between the ages of 47 and 55.
View Profile
devotedlady
I'm a 43 year old woman looking to meet men between the ages of 43 and 55.
View Profile
Kosmos075
I'm a 39 year old woman looking to meet men between the ages of 35 and 55.
View Profile
lookingsexy200
I'm a 36 year old woman looking to meet men between the ages of 34 and 45.
View Profile
KarooBoereMeisie
I'm a 34 year old woman looking to meet men between the ages of 30 and 40.
View Profile
AMy_303
I'm a 39 year old woman looking to meet men between the ages of 35 and 45.
View Profile
Cymbidium
I'm a 47 year old woman looking to meet men between the ages of 47 and 60.
View Profile
chicky582
I'm a 25 year old woman looking to meet men between the ages of 25 and 30.
View Profile
PhoenixLin
I'm a 32 year old woman looking to meet men between the ages of 25 and 42.
View Profile
HottFoxx
I'm a 46 year old woman looking to meet men between the ages of 40 and 55.
View Profile
Liesie
I'm a 31 year old woman looking to meet men between the ages of 33 and 45.
View Profile
Softberry
I'm a 36 year old woman looking to meet men between the ages of 30 and 55.
View Profile
LilaBlom
I'm a 23 year old woman looking to meet men between the ages of 23 and 33.
View Profile
Gem31
I'm a 24 year old woman looking to meet men between the ages of 25 and 35.
View Profile
pesin15
I'm a 38 year old woman looking to meet men between the ages of 18 and 100.
View Profile
Viv42
I'm a 42 year old woman looking to meet men between the ages of 38 and 55.
View Profile
HoopvolleToekoms
I'm a 32 year old woman looking to meet men between the ages of 32 and 39.
View Profile
MustLoveDogz
I'm a 33 year old woman looking to meet men between the ages of 33 and 43.
View Profile
This_is_m3
I'm a 45 year old woman looking to meet men between the ages of 45 and 50.
View Profile
Changingseasons
I'm a 44 year old woman looking to meet men between the ages of 42 and 50.
View Profile
ThisIsTheRemix
I'm a 33 year old woman looking to meet men between the ages of 31 and 41.
View Profile
molletdelvalles
I'm a 39 year old woman looking to meet men between the ages of 35 and 55.
View Profile
Graciousheart
I'm a 47 year old woman looking to meet men between the ages of 44 and 56.
View Profile
mystiqueZN
I'm a 29 year old woman looking to meet men between the ages of 27 and 45.
View Profile
Lonleyheart007
I'm a 42 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Smarag
I'm a 20 year old woman looking to meet men between the ages of 22 and 30.
View Profile
Xtine
I'm a 28 year old woman looking to meet men between the ages of 25 and 38.
View Profile
Lisa_Jayne
I'm a 27 year old woman looking to meet men between the ages of 23 and 35.
View Profile
Elyn1980
I'm a 34 year old woman looking to meet men between the ages of 35 and 42.
View Profile
PixelFairy
I'm a 21 year old woman looking to meet men and women between the ages of 18 and 35.
View Profile
Poppielap007
I'm a 23 year old woman looking to meet men between the ages of 25 and 29.
View Profile
voelkos
I'm a 54 year old woman looking to meet men between the ages of 45 and 56.
View Profile
Karendavie
I'm a 47 year old woman looking to meet men between the ages of 42 and 52.
View Profile
Athena
I'm a 37 year old woman looking to meet men between the ages of 37 and 45.
View Profile
PearlyGem
I'm a 55 year old woman looking to meet men between the ages of 50 and 60.
View Profile
sunshinebright
I'm a 55 year old woman looking to meet men between the ages of 45 and 60.
View Profile
DelightfullyTipsy
I'm a 38 year old woman looking to meet men between the ages of 30 and 38.
View Profile
iamclassy
I'm a 43 year old woman looking to meet men between the ages of 50 and 62.
View Profile
thrillsandfrills
I'm a 40 year old woman looking to meet men between the ages of 41 and 45.
View Profile
OneWay
I'm a 39 year old woman looking to meet men between the ages of 35 and 47.
View Profile
Pretty_Nerd
I'm a 28 year old woman looking to meet men between the ages of 30 and 37.
View Profile
Stiletto1
I'm a 53 year old woman looking to meet men between the ages of 50 and 57.
View Profile
Comet43
I'm a 43 year old woman looking to meet men between the ages of 40 and 54.
View Profile
Veronica2477
I'm a 38 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Boulderhopper
I'm a 44 year old woman looking to meet men between the ages of 38 and 50.
View Profile
Magnolia52
I'm a 52 year old woman looking to meet men between the ages of 50 and 65.
View Profile
KiesaCutebrowneye
I'm a 26 year old woman looking to meet men between the ages of 25 and 37.
View Profile
blondgirl
I'm a 57 year old woman looking to meet men between the ages of 53 and 60.
View Profile
butterflykisses14
I'm a 30 year old woman looking to meet men between the ages of 31 and 51.
View Profile
ContagiousLaughter
I'm a 41 year old woman looking to meet men between the ages of 37 and 44.
View Profile
Gypsey4Life
I'm a 51 year old woman looking to meet men between the ages of 50 and 62.
View Profile
Grace62
I'm a 33 year old woman looking to meet men between the ages of 33 and 42.
View Profile
LuckyCharm_440
I'm a 29 year old woman looking to meet men between the ages of 29 and 40.
View Profile
bluemon
I'm a 30 year old woman looking to meet men between the ages of 30 and 45.
View Profile
supe24
I'm a 34 year old woman looking to meet men between the ages of 35 and 65.
View Profile
Lulu_101
I'm a 36 year old woman looking to meet men between the ages of 38 and 45.
View Profile
foxy583
I'm a 20 year old woman looking to meet men between the ages of 20 and 27.
View Profile
KayBee75
I'm a 39 year old woman looking to meet men between the ages of 35 and 49.
View Profile
_Alwayssmiling
I'm a 30 year old woman looking to meet men between the ages of 30 and 41.
View Profile
Chanex
I'm a 20 year old woman looking to meet men between the ages of 23 and 26.
View Profile
itu22
I'm a 22 year old woman looking to meet men between the ages of 25 and 37.
View Profile
xine_414
I'm a 28 year old woman looking to meet men between the ages of 25 and 35.
View Profile
lenQ313
I'm a 19 year old woman looking to meet men between the ages of 22 and 28.
View Profile
JustAnna
I'm a 39 year old woman looking to meet men between the ages of 25 and 55.
View Profile
KaraatPlus
I'm a 43 year old woman looking to meet men between the ages of 41 and 54.
View Profile
ioio
I'm a 37 year old woman looking to meet men between the ages of 35 and 45.
View Profile
Dreamer1987
I'm a 27 year old woman looking to meet men between the ages of 25 and 35.
View Profile
LOVINGLIFE417
I'm a 45 year old woman looking to meet men between the ages of 43 and 50.
View Profile
AmaJ
I'm a 44 year old woman looking to meet men between the ages of 42 and 50.
View Profile
Natz79
I'm a 35 year old woman looking to meet men between the ages of 30 and 45.
View Profile
Sosialemeis2
I'm a 28 year old woman looking to meet men between the ages of 35 and 46.
View Profile
Duifie038
I'm a 45 year old woman looking to meet men between the ages of 36 and 50.
View Profile
Stella143
I'm a 35 year old woman looking to meet men between the ages of 34 and 45.
View Profile
Charms1203
I'm a 39 year old woman looking to meet men between the ages of 35 and 55.
View Profile
Gem24
I'm a 24 year old woman looking to meet men between the ages of 25 and 40.
View Profile
AngelBabe1
I'm a 27 year old woman looking to meet men between the ages of 25 and 39.
View Profile
Believer001
I'm a 30 year old woman looking to meet men between the ages of 32 and 45.
View Profile
kristella
I'm a 30 year old woman looking to meet men between the ages of 30 and 40.
View Profile
KissFromARose
I'm a 58 year old woman looking to meet men between the ages of 55 and 64.
View Profile
Sugababe
I'm a 41 year old woman looking to meet men between the ages of 32 and 42.
View Profile
KiTella
I'm a 31 year old woman looking to meet men between the ages of 29 and 42.
View Profile
Sparkie92
I'm a 22 year old woman looking to meet men between the ages of 22 and 29.
View Profile
Diena_van_die_Eike
I'm a 49 year old woman looking to meet men between the ages of 49 and 62.
View Profile
verloreWC
I'm a 31 year old woman looking to meet men between the ages of 31 and 45.
View Profile
love_passionately
I'm a 43 year old woman looking to meet men between the ages of 45 and 55.
View Profile
CC82
I'm a 32 year old woman looking to meet men between the ages of 30 and 45.
View Profile
Lemoenbloeisel
I'm a 35 year old woman looking to meet men between the ages of 30 and 45.
View Profile
DaffodilTulip
I'm a 48 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Lvit2C
I'm a 29 year old woman looking to meet men between the ages of 27 and 39.
View Profile
ChatRouge
I'm a 38 year old woman looking to meet men between the ages of 32 and 46.
View Profile
ddb65
I'm a 49 year old woman looking to meet men between the ages of 50 and 60.
View Profile
dreamsoftly
I'm a 49 year old woman looking to meet men between the ages of 47 and 58.
View Profile
AM1234
I'm a 41 year old woman looking to meet men between the ages of 38 and 46.
View Profile
philip_unplugged514
I'm a 62 year old man looking to meet women between the ages of 50 and 65.
View Profile
Woody777
I'm a 50 year old man looking to meet women between the ages of 35 and 55.
View Profile
Kawa1000
I'm a 49 year old man looking to meet women between the ages of 40 and 50.
View Profile
Gster1
I'm a 64 year old man looking to meet women between the ages of 45 and 60.
View Profile
Rick1508
I'm a 49 year old man looking to meet women between the ages of 25 and 49.
View Profile
FeaturedProfile
I'm a 54 year old man looking to meet women between the ages of 40 and 54.
View Profile
deeptime
I'm a 53 year old man looking to meet women between the ages of 48 and 58.
View Profile
Lifechanger_7
I'm a 25 year old man looking to meet women between the ages of 18 and 30.
View Profile
cloudhopper
I'm a 56 year old man looking to meet women between the ages of 45 and 55.
View Profile
Rebelinbluejeans
I'm a 62 year old man looking to meet women between the ages of 40 and 62.
View Profile
letslook
I'm a 46 year old man looking to meet women between the ages of 25 and 45.
View Profile
DoctorSpin
I'm a 41 year old man looking to meet women between the ages of 30 and 45.
View Profile
TheRisingSun
I'm a 41 year old man looking to meet women between the ages of 25 and 40.
View Profile
niemandsland
I'm a 30 year old man looking to meet men between the ages of 28 and 40.
View Profile
WanderingShadow
I'm a 39 year old man looking to meet women between the ages of 20 and 40.
View Profile
Brad88
I'm a 52 year old man looking to meet women between the ages of 45 and 60.
View Profile
cornrlius205
I'm a 46 year old man looking to meet women between the ages of 30 and 50.
View Profile
rossi46
I'm a 66 year old man looking to meet women between the ages of 55 and 65.
View Profile
waitingforgodot
I'm a 68 year old man looking to meet women between the ages of 53 and 60.
View Profile
BobTheExtremeBuilder
I'm a 47 year old man looking to meet women between the ages of 25 and 47.
View Profile
CapeLover
I'm a 49 year old man looking to meet women between the ages of 41 and 50.
View Profile
bellagio
I'm a 69 year old man looking to meet women between the ages of 55 and 65.
View Profile
ekke_706
I'm a 50 year old man looking to meet women between the ages of 40 and 55.
View Profile
JustCallMeBwana
I'm a 47 year old man looking to meet women between the ages of 28 and 38.
View Profile
Bushbaby210
I'm a 27 year old man looking to meet women between the ages of 21 and 35.
View Profile
Rumrun
I'm a 56 year old man looking to meet women between the ages of 44 and 56.
View Profile
LEO1982
I'm a 32 year old man looking to meet women between the ages of 24 and 40.
View Profile
Liefasb
I'm a 63 year old man looking to meet women between the ages of 50 and 60.
View Profile
Soulsearcher72
I'm a 42 year old man looking to meet women between the ages of 35 and 45.
View Profile
skyandsand
I'm a 31 year old man looking to meet women between the ages of 25 and 35.
View Profile
Geard1977
I'm a 37 year old man looking to meet women between the ages of 26 and 40.
View Profile
earthwormjim1968
I'm a 46 year old man looking to meet women between the ages of 40 and 48.
View Profile
Dreamzzz
I'm a 48 year old man looking to meet women between the ages of 40 and 45.
View Profile
big_guy_soft_heart
I'm a 43 year old man looking to meet women between the ages of 30 and 42.
View Profile
maybe_111
I'm a 41 year old man looking to meet women between the ages of 23 and 39.
View Profile
shadowwarrior
I'm a 59 year old man looking to meet women between the ages of 38 and 55.
View Profile
LiveLifeAlways
I'm a 43 year old man looking to meet women between the ages of 33 and 41.
View Profile
Eugene053
I'm a 54 year old man looking to meet women between the ages of 25 and 45.
View Profile
heartroll
I'm a 54 year old man looking to meet women between the ages of 49 and 60.
View Profile
koolstoof55
I'm a 59 year old man looking to meet women between the ages of 45 and 63.
View Profile
JONGKEREL
I'm a 62 year old man looking to meet women between the ages of 49 and 55.
View Profile
chester3
I'm a 54 year old man looking to meet women between the ages of 49 and 76.
View Profile
QuietDreamer
I'm a 34 year old man looking to meet women between the ages of 25 and 35.
View Profile
Mais_171
I'm a 49 year old man looking to meet women between the ages of 40 and 55.
View Profile
Summerstorm_007
I'm a 60 year old man looking to meet women between the ages of 48 and 58.
View Profile
happymaker66
I'm a 48 year old man looking to meet women between the ages of 25 and 45.
View Profile
srchinluv
I'm a 52 year old man looking to meet women between the ages of 46 and 65.
View Profile
Carden
I'm a 32 year old man looking to meet women between the ages of 24 and 30.
View Profile
arew
I'm a 49 year old man looking to meet women between the ages of 30 and 55.
View Profile
eks_joe
I'm a 52 year old man looking to meet women between the ages of 48 and 53.
View Profile
B_B_B
I'm a 43 year old man looking to meet women between the ages of 18 and 45.
View Profile
Determined_69
I'm a 45 year old man looking to meet women between the ages of 35 and 47.
View Profile
Double_N
I'm a 41 year old man looking to meet men between the ages of 25 and 50.
View Profile
oth1982
I'm a 32 year old man looking to meet women between the ages of 18 and 100.
View Profile
henisright
I'm a 50 year old man looking to meet women between the ages of 37 and 53.
View Profile
Romanticseb
I'm a 59 year old man looking to meet women between the ages of 45 and 57.
View Profile
boersoekvrou14
I'm a 39 year old man looking to meet women between the ages of 30 and 42.
View Profile
Stream_Net
I'm a 32 year old man looking to meet women between the ages of 24 and 32.
View Profile
Free_Spirited
I'm a 45 year old man looking to meet women between the ages of 32 and 42.
View Profile
Jurgy62
I'm a 52 year old man looking to meet women between the ages of 37 and 55.
View Profile
saks001
I'm a 61 year old man looking to meet women between the ages of 47 and 59.
View Profile
Rich_H
I'm a 48 year old man looking to meet women between the ages of 25 and 48.
View Profile
OldGoat4400
I'm a 53 year old man looking to meet women between the ages of 35 and 48.
View Profile
Red_Red_Wine
I'm a 61 year old man looking to meet women between the ages of 39 and 59.
View Profile
Stressfree
I'm a 58 year old man looking to meet women between the ages of 42 and 52.
View Profile
Fairtalk101
I'm a 46 year old man looking to meet women between the ages of 25 and 45.
View Profile
AJK1110
I'm a 59 year old man looking to meet women between the ages of 25 and 55.
View Profile
Glorious_Quest
I'm a 45 year old man looking to meet women between the ages of 32 and 45.
View Profile
gentlebutcrazy
I'm a 58 year old man looking to meet women between the ages of 35 and 55.
View Profile
annns
I'm a 51 year old man looking to meet women between the ages of 48 and 56.
View Profile
Ben_57
I'm a 57 year old man looking to meet women between the ages of 42 and 55.
View Profile
Breukes
I'm a 35 year old man looking to meet women between the ages of 26 and 35.
View Profile
MysticKitesurfer
I'm a 43 year old man looking to meet women between the ages of 27 and 36.
View Profile
IceDad66
I'm a 48 year old man looking to meet women between the ages of 35 and 45.
View Profile
ch_nb
I'm a 28 year old man looking to meet women between the ages of 18 and 45.
View Profile
WagOngeduldig
I'm a 41 year old man looking to meet women between the ages of 30 and 45.
View Profile
PerfectGentleman_700
I'm a 36 year old man looking to meet women between the ages of 25 and 39.
View Profile
drurie
I'm a 66 year old man looking to meet women between the ages of 60 and 66.
View Profile
TheDuke_99
I'm a 36 year old man looking to meet women between the ages of 28 and 42.
View Profile
umustbsomewhere
I'm a 61 year old man looking to meet women between the ages of 45 and 55.
View Profile
Mfactor
I'm a 41 year old man looking to meet women between the ages of 25 and 40.
View Profile
Marley77
I'm a 37 year old man looking to meet women between the ages of 28 and 35.
View Profile
GenuineJ
I'm a 64 year old man looking to meet women between the ages of 48 and 64.
View Profile
MOOLMAN
I'm a 56 year old man looking to meet women between the ages of 48 and 62.
View Profile
audiess
I'm a 50 year old man looking to meet women between the ages of 39 and 64.
View Profile
Btt76
I'm a 38 year old man looking to meet women between the ages of 25 and 42.
View Profile
sailor_X897
I'm a 54 year old man looking to meet women between the ages of 35 and 60.
View Profile
tigercat
I'm a 54 year old man looking to meet women between the ages of 22 and 54.
View Profile
LoveFriendFirst123
I'm a 56 year old man looking to meet women between the ages of 50 and 72.
View Profile
longingforu
I'm a 35 year old man looking to meet women between the ages of 18 and 38.
View Profile
Thebestone1
I'm a 57 year old man looking to meet women between the ages of 40 and 52.
View Profile
Boereman
I'm a 52 year old man looking to meet women between the ages of 40 and 52.
View Profile
Pete_1
I'm a 70 year old man looking to meet women between the ages of 55 and 65.
View Profile
MAX_33
I'm a 55 year old man looking to meet women between the ages of 33 and 53.
View Profile
JustJve99
I'm a 47 year old man looking to meet women between the ages of 40 and 45.
View Profile
Espavo
I'm a 50 year old man looking to meet women between the ages of 30 and 48.
View Profile
Cruisingoldie
I'm a 46 year old man looking to meet women between the ages of 30 and 50.
View Profile
POKEY
I'm a 44 year old man looking to meet women between the ages of 34 and 45.
View Profile
matiekat
I'm a 66 year old man looking to meet women between the ages of 18 and 100.
View Profile

Business Directory