The SA Reserve Bank in Pretoria. File picture: FINANCIAL MAIL
The SA Reserve Bank in Pretoria. File picture: FINANCIAL MAIL

The coronavirus pandemic has obscured an equally critical matter: the horrendous fallout that awaits SA in the wake of the credit rating downgrade by Moody’s Investors Service.

RW Johnson, the highly perspicacious, insightful observer of most things economic and political, has warned that SA is nearing the debt precipice the IMF has long been predicting and that the country has long been avoiding. As Johnson puts it: “A rough translation would be: your taxes are far too high, your wages are far too high and so is your government expenditure. Your government’s policies are so mad that they are steadily immiserating the whole population. You have to change course completely.”

He goes on to caution that the IMF, which from time to time assists nations with excessive indebtedness, might not look favourably on an SA request for assistance. For one thing, the ANC government has consistently ignored its advice; for another, there’s a long line of nations queuing up with begging bowls a lot more appealing than that being proffered by an ANC administration that has shot itself in its financial foot.

John Spira

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