SA business sees more downgrades after Zuma missteps
“We are expecting further ratings-agency downgrades because all the things that they said we shouldn’t do, the president has gone on to do,” Bonang Mohale, chief executive officer of Business Leadership South Africa and a former chairman of Royal Dutch Shell’s South African unit, said in an interview at Bloomberg’s office in
Fitch Ratings and S&P Global Ratings cut South Africa’s foreign-currency debt to junk in April citing concerns about policy direction, political infighting and poor governance at state companies after Zuma fired investor-favorite Pravin Gordhan as finance minister. Another downgrade to non-investment grade in the assessments for local-currency debt would exclude the nation from global indexes and lead to billions of dollars in capital outflows.
Moody’s Investors Service is the only major company to assess both
BLSA, a group of about 80 of the country’s largest companies, will be more vocal on social issues and in combating corruption, and seeking ways to transform and grow the economy, particularly after the African National Congress elects a new leader in December, Mohale said.
“We accept as business that we have been quieter,” Mohale said. “We are going to talk to government, talk to the minister of finance and talk to the president to his face and saying something publicly,” he said. “The politeness has died.”
Zuma’s eight years as national president have been characterized by scandals, policy missteps and controversial appointments that have led to deep divisions within the ruling party.
He is due to step down as leader of the ANC in December, with Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the former head of the African Union Commission and Zuma’s ex-wife, the main contenders for the party post. His term as president of the country ends in 2019.
His successor will inherit an economy that slid into recession in the first quarter and a network of officials implicated in allegedly looting taxpayer funds, while business confidence is close to the lowest level in three decades.
The ANC has been bleeding support, raising the prospect it won’t secure a majority in the next election. It lost control of
The ANC’s overall support slid to 54.5 percent in that poll from 62 percent in a national vote two years earlier, the worst electoral performance since it came to power to end apartheid in 1994.
“Any right-thinking South African knows beyond any shadow of doubt that the actions of this ANC-led government” have lost the party the 2019 elections, Mohale said. “Coalition politics is a reality today, now it is going to move to national.”