Ratings agency Moody’s has received an appeal from the Congress of South African Trade Unions (Cosatu) to put into considerations, the living and working conditions of South Africa’s poor masses and workers before making the decision whether or not to downgrade the country’s investment grade.
Moody’s delegation arrived in South Africa to commence the rating exercise as South Africa is among the countries placed on review for a downgrade or otherwise pending the outcome of an assessment of the economy.
In his statement, the president of Cosatu S’dumo Dlamini says a downgrade will have a devastating effect on the workers. He also pleaded that the agency should not expect workers not to demand for a little extra salary considering what they (workers) are going through in the country.
“If their expectation is that workers should not demand salary increases, that’s unfair. They don’t seem to appreciate what we are going through as workers here in South Africa.”
Moody’s has announced that it has placed the bond and issuer ratings of SA government on review. This will serve as a yardstick to measure the possibility that the decline in South Africa’s economic strength will gradually and consistently reverse over the medium term.
South Africa has been on the highway to a possible downgrade to junk status, but Moody’s gave a little hope by saying it needs more time to see if the situation can be averted.
South Africa’s weak economic performance was considered a risk during Moody’s rating in December considering that the local economy is vulnerable to global domestic and financial market dynamics.
The review will allow Moody’s to assess the extent government policy can stabilize the economy and restore fiscal strength in the face of heightened domestic and international market volatility. These policies include those contained in the National Development Plan.
Meanwhile, the Finance Minister Pravin Gordhan who went on an international business trip held a meeting with international investors, urging them to exercise patience with the South African economy as efforts are being made for it to have a huge turn around.
Gordhan also urged the South African political parties to set aside all their differences and focus on productive matters in the interest of the country especially as the country is going through tough times.