Gordhan’s plea: SA, unite to fight downgrade
Johannesburg - Finance Minister Pravin Gordhan on Wednesday called on South Africans to rally behind the government's efforts to prevent a downgrade by two ratings agencies.
Officials from Fitch and Standard & Poor’s are currently in the country to conduct an assessment.
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The two ratings agencies are due to release their results on June 3.
Opposition parties warned in Parliament that the threats on Gordhan would harm the economy and push the country into a downgrade.
Gordhan, who was replying in the debate on the Appropriations Bill, said the country needed to pull together.
Early this week, the minister called for the people of South Africa to protect the National Treasury from state capture.
He also hit back at law enforcement agencies for their threats to arrest him, describing this as harassment.
Moody’s retained South Africa’s credit rating two weeks ago.
But some opposition parties warned that Fitch and S&P may not be kind as Moody’s in the current political climate.
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Gordhan said they had to do everything to avoid a downgrade next month.
“It's us as the ANC government that have said the rating agencies must give us time to reignite growth,” he told Parliament.
He said he agreed with some of the MPs that everything had to be done to avoid a downgrade.
This was because the impact of the downgrade would cut across society, he said.
Parties must stop squabbling about who was right or wrong in terms of reigniting growth in the economy, or have better economic policies.
“One thing we must focus on is how we inspire confidence in the economy, and how we stop shooting ourselves in the foot,” said Gordhan.
Steve Swart of the African Christian Democratic Party said Gordhan had taken serious measures to prevent a downgrade and must be supported in this regard.
However, his hard work was undermined by what was going on in the country, and rating agencies want political stability and fiscal consolidation.
He added that while Moody’s maintained South Africa’s credit rating, Fitch and S&P might be pessimistic.
South Africa could be downgraded by these two rating agencies next month, warned Swart.
Christopher Msimang of the IFP expressed a similar sentiment, warning that South Africa needed to tread carefully.
“While Moody’s rating was neutral, the other two rating agencies might not be kind enough,” he said.
Moody’s rated South Africa two notches above sub-investment grade, while the last grading by Fitch and S&P was one notch above the downgrade.