Ratings agency Moody’s concern that the ANC could be headed for a split should be taken seriously, according to political analysts.
This follows revelations by Deputy President and ANC presidential hopeful Cyril Ramaphosa that he had met with the agency, which had expressed concerns that the ruling party was heading for a split due to factions and instability ravaging it ahead of its national conference.
Political analyst Protas Madlala said politically and economically, the country was on a downward slope.
“Politically, it (ANC’s internal battles for positions) is affecting the country’s economy. It’s a scary situation,” Madlala said.
He said the root causes of problems facing the country were due to the ANC’s internal battles over leadership positions.
“There is already a split within the ANC. But an official split would be better than this factionalism because it is the worst form of splitting when they are betraying one another.
“It is going to be very difficult to solve this factionalism issue,” Madlala said.
Political battles had a negative impact on the economy and in steering the country in the right direction. He said it would be better if there was an obvious split so that the country would know what it was dealing with.
“How does it help knowing that Ramaphosa and Zuma are leaders of the ANC when we know that both of them are not pulling in one direction?” Madlala said.
However, another political analyst, Daniel Silke, said that although the government was concerned about what Moody’s had to say, it was premature for Moody’s to believe that a split within the ANC was imminent.
“I would argue that Ramaphosa is doing his job by presenting a brave face to the ratings agency, as the American-based agency ultimately holds the key to whether we are officially in junk status or not because they now have us two notches above junk status,” Silke said.
He added that if Moody’s went ahead with the full two-notch downgrade, there could be a substantial capital outflow from South Africa. The government, through Finance Minister Malusi Gigaba or Ramaphosa, was trying to placate Moody’s as far as possible regarding its concerns.
“Moody’s are the ones that really can condemn us to junk status, but I don’t think that it is a valid concern from Moody’s themselves. Clearly, there is a concern over the implementation of policies.
“For instance, like what kind of economic policy they (the ANC) would have and what kind of management we would have, particularly with regard to government coffers and state-owned enterprises.
“This is an issue that would concern me more than the issue of political splits, which I think is not on the horizon,” Silke said.