Carol Paton Editor at large

If President Cyril Ramaphosa didn’t already feel the weight of the entire country on his shoulders, he must surely feel it now. SA’s investment grade credit rating by Moody’s is all that stands between us and a spiral of rising debt service costs, rising borrowing costs, decreased social spending and — as a result of all of those — increased social instability. We are lucky that Lucie Villa, Moody’s analyst for SA, didn’t see the need to pull the trigger. Some economists, like Sanlam Investments chief economist Arthur Kamp, argue convincingly that, in terms of the Moody’s methodology, not enough had changed to compel Moody’s to make a move, especially one that would set off a deeply negative chain of events. So even though electricity supply constraints are back, debt and fiscal consolidation are not in sight and the growth outlook has deteriorated, in the big picture SA still looks able to pay its debts. With only 10% of government debt dollar denominated and deep and liquid domest...

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