With the DA (Democratic Alliance) affirming the SA downgrade to junk status as a clear vote of no confidence in President Zuma, the EFF (Economic Freedom Fighters) asserted that the only way to save South Africa is to remove ANC, which has lost control of Zuma, out of power.
It emerged yesterday that S&P Ratings lowered the long-term foreign currency sovereign credit rating on the Republic of South Africa to ‘BB+’ from ‘BBB-‘ and the long-term local currency rating to ‘BBB-‘ from ‘BBB’.
Also, S&P downgraded the short-term foreign currency rating to ‘B’ from ‘A-3’ and the short-term local currency rating to ‘A-3’ from ‘A-2’.
While the outlook on all the long-term ratings is negative, South Africa’s long-term national scale rating was lowered to ‘zaAA-‘ from ‘zaAAA’. However, S&P ratings affirmed the short-term national scale rating at ‘zaA-1’.
SA downgrade to junk status was inspired by the divisions in the ANC-led government which led to changes in the executive leadership.
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Precisely, S&P Ratings specified that the axing of the finance Minister, Pravin Gordhan have put policy continuity at risk in the country. That, S&P Ratings explained, increased the likelihood that economic growth and fiscal outcomes could suffer.
Reacting to the development, the DA called on President Zuma to resign immediately and allow a new administration to stabilise the economy. To the party, the downgrading of SA is nothing but a vote of no confidence in President Zuma.
“Zuma has clearly learnt nothing from the market reaction to his firing of then Finance Minister Nhlanhla Nene in December 2015. Instead of acting in the best interests of the country and its people, Zuma chose to act in his own best interests by firing Gordhan and Jonas.
“The negative effects of this downgrade – which is likely not to be the last – will be felt by all South Africans. This downgrade will result in higher government borrowing costs, less money for basic services, and less job creating investment.
“Zuma is on a path of destruction and must be stopped. If he does not surrender to the will of the people and resign, then Parliament must remove him by supporting our Motion of No Confidence which will come before Parliament in the coming weeks,” DA stated.
Likewise, the Fighters lamented that SA downgrade to junk status would have a severe impact on the economy.
“At a macro level, this is a serious threat to the country fiscal policy as the government borrows money to cover its budget deficit because as a country, we spend more than we collect in taxes.”
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EFF also wailed that the decision to downgrade South Africa’s sovereign credit rating to junk is catastrophic because of the ruling party’s macroeconomic policies.
“ANC neoliberal macroeconomic policies relegated the core responsibility of country’s macroeconomic policy to foreign international capital and rating agencies. South Africa’s macroeconomic policies and structure are such that prioritises maximum return on investment for foreign international capital.
What makes the problem even more devastating is that the return on investment is from speculative market and financial sector…We find ourselves in this situation because the ANC prioritised pleasing the market at the expense of meaningful redistributive economic policies.
In addition, we are here because Jacob Zuma has elected to put the business interests of the Guptas above the interests of the country.
The Gupta capture of the treasury by removal of finance minister without any sound reasons is the ultimate reason why we are now a junk status country. Zuma did this, not because he carries a radical economic vision for our country; but because he wanted access to treasury for his personal corrupt business interests.”
With the above, the Fighters indicated that the ANC has lost control of Zuma and, offered that the only thing that will now save the country is the ousting of ANC as the ruling party.