Moody’s downgrade strengthens the case for a snap debate on the economy in Parliament

Issued by David Maynier MP – DA Shadow Minister of Finance
09 Jun 2017 in News

The decision by Moody’s to downgrade our sovereign credit rating to “Baa3”, with a “negative outlook”, is more bad news, in a string of bad news, and is a clear vote of no confidence in finance minister Malusi Gigaba and President Jacob Zuma.

The decision by Moody’s highlights the fact that “political developments” have had a negative effect on “institutional strength” which “casts doubt over the strength of and sustainability of the recovery in growth and stabilisation of the debt-to-GDP ratio over the near term”.

The ratings action means our long-term local currency debt, which forms 88.2% of our R2.2 trillion net debt, now hovers dangerously at one notch above “junk status”, with a negative outlook, following ratings actions by the two most important ratings agencies, Moody’s and Standard & Poor’s.

We will not sit back and do nothing when the economy has slipped into recession, and when a staggering 9.3 million people do not have jobs, or have given up looking for jobs, in South Africa.

And that is why we have written to the Speaker of the National Assembly, Baleka Mbete, calling for a “snap debate” on measures to deal with the recession, ratings downgrades and mass unemployment in South Africa.