Now Moody’s begins to turn the screws
EDITORIAL: Politicians must take eyes off leadership race and do what we pay them to
If government is serious about addressing the downgrade, it will need to take an industrial-strength hose into the corridors of inept and corrupt state-owned enterprises — and it will need to do it pronto
The assault on SA’s institutions by President Jacob Zuma, laid bare during his March cabinet reshuffle, has led to a discernible change in tone from ratings agency Moody’s. It’s important because, until now, Moody’s was the most benevolent of the three ratings agencies, the one agency that had swallowed government’s story and bought its vision. This is why it had kept SA’s sovereign rating at least one notch higher than that from Fitch and S&P. It was also why, in March 2016, Moody’s chose not to downgrade SA, citing the country’s strong institutions, led by an independent judiciary and a rock-solid national treasury. In March this year, when Zuma axed Pravin Gordhan as finance minister, there was an almost unseemly scramble for Fitch and S&P to downgrade SA’s foreign currency rating to junk status. Even then, Moody’s waited. Finally, on Friday, Moody’s showed its hand. Tellingly, it illustrated a subtle but important shift in tone, away from the more benevolent tone of the past. In...
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