Rating announcement by S&P following recent political developments

262225ea83644487b88ec3182e94e068-1

262225ea83644487b88ec3182e94e068-1

Finance Minister Malusi Gigaba

Government notes the sovereign rating announcement by S&P. While S&P has lowered its rating of foreign currency-denominated debt to a sub-investment grade, rand-denominated debt – which constitutes 90 per cent of the debt portfolio – retains its investment-grade rating.
While the leadership of the finance portfolio has changed, government’s overall policy orientation remains the same. As indicated by Minister Gigaba on 1 April 2017, “government has been, and will remain, committed to a measured fiscal consolidation that stabilises the rise in public debt”.
South Africa is committed to a predictable and consistent policy framework, which responds to changing circumstances in a measured and transparent fashion. Open debate in a democratic society should not be a cause for concern, but reflects an important means to accommodate differing views. South Africa’s constitutional arrangements remain robust. These key institutional strengths are acknowledged by rating agencies.
This rating announcement calls for South Africans to reflect on the need to sustain and act with urgency to accelerate inclusive growth and development so that we can reverse the triple challenge of poverty, unemployment and inequality. Reducing reliance on foreign savings to fund investment and relying less on debt to finance public expenditure will secure South Africa’s fiscal sovereignty and economic independence.
Government remains committed to making sure that its work with business, labour and the civil society continues in order to improve the business confidence and implement structural reforms to accelerate inclusive economic growth.
The Minister of Finance will engage further with the media tomorrow to discuss this outcome.
Issued on behalf of National Treasury, 3 April 2017

12 Comments on "Rating announcement by S&P following recent political developments"

  1. The problem with these rating agencies is that political changes in US and EU are generally not factored in when ratings are done. Does the US or EU allow rating agencies to interfere in their politics to an extent of telling them not to reshuffle their Cabinets or not to remove a particular minister? Did the much criticised election of Trump result in a negative outlook of the US economy? It seems different criteria are used to rate first and third world countries to an extent that these agencies even interefere in constitutional matters such as a cabinet reshuffle. And their decisions are informed by what they think the future will be like. For example, they say a reshuffle signals a change in fiscal policy and that will negatively affect economic growth. What if thats not the case? Our budget has already been adopted so it thus is not wise to change fiscal policy. Is the agency saying we shuld not pursue radical socio-economic trasnsformation to avoid a downgrade? Remember they downgraded Brazil and the President was subsequently impeached. Seems they are following the same route here.

  2. Really? I think he is not on the same page as at least 3 of the executive are on transparency… Now barely 4 hours after this man assured the nation we wil not be downgraded, his insight into finance and business becomes clear. He actually spins that the downgrade is about what they should do! The rest of us watching the circus have listened and read what S&P has said. It’s ALL about what has been happening since the big clown, master of the ring went to Saxonwold last Thursday… and when ANN7 announced the punch line before the big clown could tell his joke!!! Although it is an old joke from two Decembers ago… Let us try and guess what other clown would recall his honest, best performing, most respected worldwide by serious investors (that we dooo need sooo badly) and by all in SA with more than two braincells, any colour, any language, any party, cabinet members, replace them with characters that have track records as poor as himself and keep those found totally incompetent by none other than our very own constitutional court? In his defence, we know how he can ignore the constitutional court like a blue light brigade driver ignores a red robot so he was totally unaware of their pronouncement. The clown finds himself now either in a state of shock or in denial. If we remember his masterful summary of the Sassa debacle, “their is no crisis” seconds before the Titanic sank, then it is obvious how he feels. Exactly like the king that had no clothes on. Everyone and I mean everyone but those also without clothes are cracking their butts laughing!!!

    • Pinky Khoabane | April 4, 2017 at 7:22 am | Reply

      Dear Spockzie

      Who is the clown and when did it go to Saxonwold?

      As usual some of you make claims here which they cannot corroborate when challenged. I hope you come back and answer this question. And if you do come back, leave the emotion and deal with the answers. You fail your argument when name-calling.

      – What did Gigaba do in the days between Gordhan went to London until the downgrade?
      – Why has the downgrade come to be done now when review was meant for June
      – There are many economists who don’t follow mainstream economics who say there is nothing in South Africa in the last three years or so that has worsened the economy to a point of the recent threats of a downgrade. The only difference is calls for radical economic emancipation of black people.

      Kindest

      PK

    • Jeff Koorbanally | April 4, 2017 at 8:55 am | Reply

      The reasons given by the rating agencies are misleading and are political. The down grade has nothing to do with the President, nor his newly appointed Finance Minister, in fact we should have been down graded to this level a year ago, as a favor to Pravin and his bosses they decided to keep us above.Bottom line is that Pravin has been borrowing too much,while allowing the WMC to continue to sabotage our economony without penalties or recoveries, CIEX recoveries is one example, the other is the recent coalition of the bank to manipulate our currency, enriching themselves hundreds of billions, full recovery of the gains plus heavy fines should have been pursueded, instead they talk about 10% and not even a mention of taxation.Treasury further proclaimed that the country was loosing R30bn a year calculated as 20% of the annual procurement budget of R150bn, they went further to say this equated to R700bn 1994-2016.they claimed it was going into a black hole, they need to show us where’s that hole we can dig that money and pay our debt and be relieved from Western Capture of IMF, World bank and these rating agents… Am also sure that this money somehow benefited WMC, that would be the only reason Pravin did not recover it, that’s the trend he has demostrated(Protector of WMC)

  3. Greg Mashaba | April 4, 2017 at 5:13 am | Reply

    The announcement by S&P is nothing else but a blatant attempt at steering the political and economic development of our country in a direction favored by by conservative elements in London and Washington .They are aided in this process not only by unpatriotic opposition groups but also by remnants of the 1996 class project , some of whom are still active within the ANC and its Alliance Partners .
    Trump took over in the USA and the rating agencies did not make any pronouncements regarding “political uncertainty ” in that country despite the ever confusing actions and political pronouncements emanating from the White House .

    • Pinky Khoabane | April 4, 2017 at 7:15 am | Reply

      Dear Greg

      If you’re new to our community welcome. Couldn’t agree with you more.

      Rating agencies have become political tools to force countries to adhere and dance to the tunes of the global financial hegemony of the West.

      Aluta Continua

  4. After all these years of looting from our beautiful country by the West they still want to keep a status qou by downgrading south Africa to junk status this is part of their agenda. It is high time we keep our raw mineral resources why is so difficult to cut this arrangement of allowing the West to mine and wipeout our resources without beneficiation that is why our country’s economy is dwindling.

    • Pinky Khoabane | April 4, 2017 at 10:41 am | Reply

      Dear D’Smart

      Welcome to UnCensored. We have so much debt it is simply incredible. Trillion, someone said.

      It is simply incredible.

      We watch and see how this will unfold.

      Still feel extremely bitter that ANC decided to take-on apartheid’s debt.

      Kindest

      PK

  5. Well Done Mr. President.
    You are doing well in pursuing the Radical Socio-Economic Transformation to empower black people who have always been oppressed by WMC.
    If former President Thabo Mbeki did what you did now ten years ago, our country and black people in particular would be much better off economically than what they are right now.
    The remnants of the 1996 class project and the SACP have decided to sell us out to WMC, and that is why they are so comfortable in using it’s (WMC) Fake News Media.
    Where have you seen communists who do not agree to land ownership by people, State owned Central Bank, State owned Banks and Mines? There are no communists in South Africa but only a Parasitic Organisation of people looking for Government Positions through the ANC so that they can enrich themselves by serving the WMC.
    It must be noted that WMCs Fake News Media will always vilify, malign and even brutalize someone who doesn’t toe the WMCs line, like we have seen Pravin Gordhan and his ‘Free SA’ goons do to ANN7 journalist on Friday.
    As for the Racist Rating Agencies, I have always maintained that, these Agencies are Racists like all other Organisations which are forced on African by the West like the IMF, ICC, World Bank and their aim is one, enslave Africa and keep looting the continent.
    Now the rating Agencies want to dictate who should be presidents in other countries except the US and UK because those are their masters.
    Pinky as you rightfully ask “Why the review due in June is done now”?
    The aim of the Regime Change Brigade (The West) here, is to give credence to its frivolous motions of no confidence tabled by it’s Agents on yearly basis.
    They want to remove a black man who want to empower black people from power, and replace him with their puppet and that must be done quickly.
    Pinky, I really appreciate you for creating this space for us to voice a different view from the drivel we are always fed by WMC Fake News Media and to hear from other progressive people like Greg.
    But now and then we have pea minded racists and WMC surrogates who try to confuse us with their uncorroborated, nonsensical claims.
    We must accept them and appreciate that they do come to this forum, and those who want to be enlightened will be enlightened. It is a process not an event.

    • Pinky Khoabane | April 4, 2017 at 10:50 am | Reply

      Dear Mzi

      Thank you very much for your kind words on the platform. The greatest measure of democracy is defending the rights of those you detest to speak their views. I could easily send all these racists who come here into trash – but I don’t. It’s quite unfortunate that they struggle to defend and counter the arguments made here. But that is part of how we expose them – invite them to debunk the views and show us another version of the truth – they never do until they return to spew their bile again…

      Kindest

      PK

  6. Jannie vd Merwe | April 5, 2017 at 2:57 pm | Reply

    It astounds me that people are talking as if the whole South Africa are now at junk status. The junk status refer to only 10% of the foreign currency debt, 90% of the rand denominated debt is at investment grade. It should not be too hard to figure out that according to some foreign institutional investors their mandate is not to invest in a country whose investment rating has been graded as junk. Some institutional investors do not have this clause so they are still free to invest should they wish to. Economic warfare indeed PK. Rating agencies should at least have waited 90 days to see what will happen in South Africa. Then again we remember what they did in America where they have over rated companies whom subsequently collapsed. We know what fines they were forced to pay. Can they be trusted? No? Never.

Leave a comment

Your email address will not be published.


*