President Jacob Zuma during his State of the Nation Address (SONA) to a joint sitting of the National Assembly and the National Council of Provinces in Cape Town on 9 February 2017.
CAPE TOWN– International ratings agency Fitch’s decision on Friday to downgrade South Africa’s sovereign credit rating to sub-investment grade, so-called junk status, just days after S&P Global also downgraded the country, “is proudly brought to South Africa by” President Jacob Zuma, the Inkatha Freedom Party said.
Fitch Ratings downgraded government’s long-term foreign and local currency debt to “BB+” from “BBB-“, a non-investment grade rating.
“The decision by Fitch Ratings to downgrade South Africa to junk status hot on the heels of [S&P Global’s] similar decision earlier this week is not a surprise but remains of grave concern as it is the poorest of the poor who will bear the brutal brunt of this decision’s effects amid high unemployment and stunted economic growth. This downgrade is proudly brought to South Africa by Mr Zuma,” IFP spokesman Mkhuleko Hlengwa said.
This credit downgrade to junk status effectively meant that it would be more costly for South Africa to borrow, and the rand would be adversely affected, increasing the cost of imported items.
The IFP had consistently warned that South Africa’s economy was not something to willy-nilly play with because it was not immune to external factors such as ratings agencies, Hlengwa said.
Repeatedly, in the face of the threat of downgrades, the IFP had warned Zuma against reckless, ill-informed, and irresponsible decisions around economic matters because they would have detrimental effects for South Africa. The chickens had come home to roost. Zuma “simply does not get it”.
“The economy is not an instrument to settle petty factional and political scores within the ANC; and every time Mr Zuma ventures down this avenue it is South Africans that suffer.
“The IFP calls on all South Africans to not give up the struggle for good, clean, transparent, and trustworthy governance. If the ANC cannot remove Mr Zuma then an active citizenry must do so because ultimately it is the citizenry which is suffering under the Zuma regime.
“Our democracy has bred a regime and a dictatorship, and now is the time to draw a line in the sand and say this rot ends here and goes no further. Our economy and our future can ill-afford the continuation of Mr Zuma in office.
“On the 18th of April parliamentarians must act in the best interests of South Africa and vote Mr Zuma out to avert further damage to our economy. This downgrade adds fuel to a burning economy and the South African Reserve Bank will most likely hike the prime lending rate above 10.25 percent. South Africa is in dire straits,” Hlengwa said.