LOOMING DICTATORSHIP
Time for all to speak out against this alarming twist of a looter continua
Credit rating cuts and higher taxes on the cards — corporate SA must push for no-confidence vote in Zuma, writes Magda Wierzycka
For many South Africans, what happened last week may seem far removed from the reality of their daily lives. And yet, apart from the moral outrage that flashed for a moment and may soon be forgotten, everyone should feel personally robbed. Let me explain why. Credit ratings agencies are likely to rate our government debt as "junk" as a consequence of high political risk and a lack of sound economic policies. This means that the cost of borrowing for SA increases significantly. The government debt currently stands at R2.2-trillion. The country pays R169bn in interest every year. We need to borrow R149bn this year. If our cost of borrowing increases by just 1%, that interest bill goes up by R1.5bn. The rand depreciating adds to that. So, expect your taxes to go up. A lot. International investors are pulling their money out of the country at a rapid rate. The fallout started on Friday. The immediate effect is a fall in the value of equities and bonds, while the rand depreciates. In pra...
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