ACCOUNTABILITY AT THE HEART OF TRUST
Article by Khanyi Moshia
Irrespective of South Africa being downgraded to junk status by Moody’s and Fitch ratings agencies, Finance Minister, Tito Mboweni says the government is ready to carry out measures to improve economic growth, and reduce the impact of Covid-19.
South Africa has officially been moved to junk status by all three major rating agencies namely: Standard & Poor (S&P), Fitch and Moody’s.
Minister Mboweni assures all South African citizens the government has a mandate to minimize and address the impact of Covid-19 on the economy by implementing measures to improve economic growth and set government finance on a sustainable trajectory. He also emphasized that this would require close collaboration across the different sectors of the economy.
However, rating agency, Fitch says they’ve downgraded South Africa’s economy by one more notch due to no path towards stabilising the government’s debt, especially during the Coronavirus pandemic.
Even though Fitch already downgraded South Africa to junk status in 2017, the rating agency says that the country’s GDP is predicted to contract by 3.8% this year and a moderate recovery is only expected next year.