THE LATEST shifting of musical chairs at three of South Africa’s critical state enterprises, including SAA, was unlikely to sway ratings agencies, analysts said yesterday.
The changes are mostly too little, too late, especially for Fitch, which is due to issue a credit rating on South Africa today. However, the involvement of Deputy President Cyril Ramaphosa, in the new turnaround strategy, was viewed as a glimmer of hope, albeit a faint one.
The transfer of the carrier to the Treasury was seen as a good development that ratings agencies would take a positive view on.
“They are panicking, that is my initial perception,” said Econometrix chief economist Azar Jammine, who earlier this week predicted that Fitch would downgrade South Africa’s credit rating to one notch above investment grade to come in line with Standard & Poor’s downwardly revised rating reached six months ago.
Jammine’s take comes just three days after SAA made an impromptu launch of a 90-day action plan meant to spearhead a new direction that included the potential acquisition of a 25 percent equity stake in the national carrier by Abu Dhabi-based Etihad Airlines and termination of costly routes among other things.
Though he is now spread too thinly over government and the economy’s trouble spots, Ramaphosa’s role as new overseer – of Eskom, SAA and the SA Post Office – is likely to inspire the confidence of business in the turnaround of the national carrier, leading to their involvement.
“They are lacking adequate leadership, everyone who has been appointed before has been tainted in some way, so Ramaphosa is seen as the ANC’s Mr Fix-it and he carries favour with business. I have worked with him and am confident of his capabilities,” Jammine said.
On the other hand, the silence of Minister of Public Enterprises Lynne Brown on SAA indicated the slippery mire she has found herself in after having a fallout with SAA chair-woman Dudu Myeni over the suspension of chief executive Monwabisi Kalawe.
It has also been said she was over her depth regarding all the problems at state-owned enterprises.
Davie Roodt, the chief economist at Efficient Group, said he was not overly convinced by the changes at SAA.
“It makes no difference where it (SAA) is going to be, maybe (the) Treasury is more in tune with finances, maybe they will be stricter, it is a positive thing, as they say the proof of the pudding is in the eating, but the answer to solving SAA’s problems is to privatise it,” Roodt added.
He conceded that Fitch would already have made a decision but that other agencies would wait on Finance Minister Nhlanhla Nene’s debut Budget speech in February to make a decision on the country’s rating.
Professor Ben Smit at the Stellenbosch University Bureau for Economic Research threw his weight behind the new plan.
“There is a chance to resolve the problems substantially better now than a week ago,” he said. – Banele Ginindza