‘South Africa is standing at the threshold of recovery’ – ANC’s Zweli Mkhize says junk status would be unfair

Zweli Mkhize Picture: RAYMOND PRESTON
Zweli Mkhize

A ratings downgrade by S& P Global Ratings for the country will not fair‚ ANC treasurer general Zweli Mkhize said on Friday‚ ahead of the rating agencies announcement expected later today.

S& P is known to be more pessimistic than its fellow rating agencies — Moody’s and Fitch‚ which kept the ratings unchanged last week.

The announcement is expected after the close of the markets on Friday‚ with market sentiment cautious after S& P downgraded Eskom earlier.

Mkhize said the South Africa had made a number of improvements over the last two months‚ which included a proposed national minimum wage.

“South Africa is moving further forward and therefore does not deserve a downgrade‚” he said on the sidelines of a the Benguela Global Investor breakfast in Sandton.

“When we met with them [S& P] we made our point and plea‚ in that we believe the country is actually standing at the threshold of recovery and we don’t believe that a downgrade will be a fair acknowledgement to the effort we made to stabilize the economy.”

The response from the rating agency was that in the past markets had rewarded SA when it did well‚ and S& P were “simply observers from the side”‚ Mkhize said.

The African National Congress’ economic transformation sub-committee head Enoch Godongwana said S& P was the rating agency which focused more on the politics.

S& P has SA just one notch above subinvestment grade (“junk status”) and on negative outlook.

Mkhize said rating agencies needed to have the right perspective about the country and the economy and not be swayed by media headlines and political noise.

“At the end of the day the rhetoric about pleasing the rating agencies is not the point. The real point is they need to know the true story‚ and we have to make sure that our narrative is based on the realities of what we are trying to solve‚” he said.

Mkhize said when economies were not doing well‚ ruling parties became the victims.

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