How climate change undermined SA’s economic and financial stability on way to junk status
The International Panel on Climate Change says challenges are to increase as temperatures rise at twice the global average
As governments worldwide rebuild their economies in the wake of the Covid-19 pandemic there is also a need to strengthen resilience to climate change. This is particularly true in Southern Africa, which has been hit with repeated climatic shocks in recent years, adversely affecting macroeconomic resilience and financial stability. These challenges are expected to increase — according to the International Panel on Climate Change, temperatures in Southern Africa are rising at twice the global average.
Though the SA government’s 2012 national climate change response paper noted the increasing frequency and severity of climate shocks, the country remains exposed to them. In March 2020 Moody’s ratings agency downgraded SA’s credit rating to junk status, owing partially to the country’s exposure to “frequent climate change-related shocks such as droughts, which undermine the agricultural sector's performance and weigh on growth”. This was evidenced by the challenges facing the stat...
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