The cabinet of the ANC president Jacob Zuma is directly responsible for the international rating institution Standard & Poor’s, lowering South Africa’s credit rating to junk status.
Standard & Poor’s maintains that the new finance minister, Malusi Gigaba, is not trustworthy or credible in the financial world. Gigaba in fact just after he took over the portfolio, and announced that the state will incur more debt to finance projects. He did not mention what projects it will be, but it is generally accepted that the projects will be around black favoritism and that the radical economic transformation can be implemented at great expense.
The consumer will be directly affected by this, as economists predict that interest rates could significantly increase shortly, the economic growth rate will still be lower and that the taxpayers will have to pay the bill for greater interest on government debt.
FF Plus in its response to the downgrade said Zuma has once again proved that he will put his own interests above those of South Africa. “The people of South Africa already suffer financial pressure will now be hit harder, and it’s all caused by President Zuma,” said FF +.
Meanwhile, Moody’s Investors Service, one of the other three major rating institutions, announced that it has placed South Africa’s credit status on review to (or “intending to”) downgrading.
As expected, the RAND declined further from the announcement. The rand fell to R13,81 to the dollar, to R14,73 against the euro and to R17,18 against the pound.
Read the original article in Afrikaans on Die Vryburger
South Africa Today – South Africa News