We failed to grasp full cost of downgrades, says ANC
Government may need to rein in spending
While the ANC acknowledges that it does not yet know the full economic effect of SA’s credit ratings downgrades to junk status, the party has conceded that a recession was a possibility. It said this might mean the government would need to rein in spending to work itself back to investment-grade status. "We don’t have the full understanding of what the implications are at this stage‚" Enoch Godongwana, chairman of the ANC’s committee on economic transformation, said on Sunday. SA needed to "pull together" to overcome its economic problems, he said. Acknowledging that party members lacked a common understanding of the fiscal implications of a sovereign credit downgrade on government programmes, he said the party would begin a prolonged period of introspection.Briefing the media at the party’s Johannesburg headquarters, Godongwana reiterated that the party’s main economic priority remained transformation. Ratings agencies Fitch and S&P Global Ratings last week downgraded SA’s sovereig...
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