Downgrade may stall Zuma’s free-fees plan
The Treasury hints at a phased-in strategy, while S&P opts not to wait for ANC conference and junks SA
The Treasury has strongly hinted President Jacob Zuma’s free-fees plan is being revisited and will be phased in more gradually than initially mooted. A promise to do this and to implement a package of measures to address the budget shortfall appear to have helped to persuade at least one of the ratings agencies to hold fire on a downgrade ahead of the ANC’s elective conference in December and the budget in February. But S&P Global Ratings opted not to wait, downgrading SA’s ratings on Friday. Its view is that whoever wins the ANC’s presidential race will face a similarly tough economic challenge and that measures to tighten the budget further could worsen SA’s growth outlook, at least in the short term.S&P senior director: sovereign ratings Frank Gill said S&P’s ratings committee had considered waiting until after the elective conference but was of the view that "whoever the ANC decides to nominate as the party leader and potential next president is facing a very tough economic chal...
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