ECONOMIC CHALLENG
KHAYA SITHOLE: Let us stop mooching in ratings junkyard
SA’s biggest problem remains the inability to meaningfully tackle the problems of unemployment, inequality and poverty
One of the unintended achievements of the Zuma years is that they brought into the national consciousness the role of ratings agencies. Before the various inexplicable cabinet reshuffles, most citizens had little awareness of ratings agencies. Since then, the role and methodology of the agencies have been called into question. Given the hysteria of our national discourse on all matters where society, politics and economics intersect, the views have ranged from the informed to the ridiculous. Last week Moody’s Investors Service issued its latest ratings statement on SA, which resulted in us barely holding on to investment-grade status. In explaining its stance, Moody’s mentioned the various interventions that have occurred since the change of political leadership in the country. These had the effect of persuading Moody’s that we are on a different path towards fiscal discipline and tightening the national purse strings. In addition, Moody’s mentioned the increase in value-added tax (...
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