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#junkstatus puts SA on knife edge

The Zuma Era
Johannesburg – President Jacob Zuma’s woes worsened on Monday after opposition parties called for him to go because of the downgrade to junk status by rating agency Standard & Poor’s.

However, the Progressive Professionals Forum (PPF) described the downgrade as political machinations by the ratings agency.

Mzwanele Manyi of the PPF said South Africa could not be judged on the removal of Pravin Gordhan as the finance minister last week.

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President Zuma File picture: Siphiwe Sibeko/Reuters

“We don’t deserve this. This is political machinations by ratings agencies. There is nothing Gordhan was doing that Malusi (Gigaba) won’t do in terms of policy,” he said in reference to the new minister of finance.

But the Banking Association of South Africa (Basa) said the country had been warned that political uncertainty would lead to a downgrade.

Basa managing director Cas Coovadia said this was the price South Africa was paying for Zuma’s decision. He said they had warned in the past few days that the decision to axe Gordhan would lead to a downgrade to junk status.

The ratings agencies had warned them recently that political uncertainty would drive the country to junk status, said Coovadia.

He said that when Zuma takes decisions that are not in the national interest, these were the results for South Africa.

Political parties also called for Zuma’s head, saying he had done enough damage to the economy.

DA leader Mmusi Maimane said South Africans needed to stand together for the removal of Zuma.

It was time for even those within the ANC to work with all parties to remove him from office, he said.

“President Zuma should resign immediately to allow a new administration to stabilise our economy and to staunch this growing crisis,” said Maimane, adding that there was no time to waste because Zuma had done enough damage.

ACDP leader Rev Kenneth Meshoe said the downgrade was a disaster for the poor and the vulnerable. He said the cost of borrowing would now increase and that Zuma had created the problem. He called on those still backing Zuma to finish his term of office to think again.

IFP spokesperson on finance Mkhuleko Hlengwa said the downgrade would spell disaster for South Africa. He said there was no more time to waste and that Zuma must go now.

“This downgrade was actively engineered by Zuma because of his hard-headed attitude and arrogant rational thought about what is good for South Africa,” he said.

“The economy is bleeding and the poorest of the poor will bear the brunt of this downgrade, which could have and should have been avoided,” Hlengwa added.

Dennis Bloem of Cope also called for Zuma to go, and said he must not be allowed to further cause harm to the economy.

He said the poorest of the poor would suffer because of his decisions and food prices would escalate.

Bloem said Zuma was not acting in the national interest and he had to quit.

Professor Somadoda Fikeni of Unisa said the downgrade would put more pressure on Zuma to go.

He said South Africa had dreaded the junk status because of its serious implications, including the high cost of borrowing and higher food prices.

He said this would put pressure on Zuma to go.

The economy would not grow beyond 1% this year, after it grew by 0.3% last year.

“In a year like this when politics is much more prominent than economics, you will not achieve that.

“We may even achieve a target below 1% unless something dramatic happens,” Fikeni added.

Dawie Roodt, chief economist at The Efficient Group, also said South Africa has paid the price for Zuma’s poor decisions. He said South Africa would be downgraded by Moody’s as well on Friday when it releases its own review.

On Monday night, the ANC Women’s League said they were disappointed but not surprised by the hasty decision taken by Standard &Poor’s to downgrade South Africa into junk status.

The National Treasury could not be reached for comment at the time of publication.

The Star

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