‘SA avoided rating downgrades because of labour, govt working together’
Cyril Ramaphosa says without consensus, the country would have been in a different situation today.
JOHANNESBURG - Deputy President Cyril Ramaphosa says it was through labour, government and business working together that the county was able to avoid rating downgrades.
Ramaphosa was speaking at the Gauteng Economic Indaba in Sandton.
Earlier today, ratings agency Fitch affirmed South Africa's investment grade credit rating at BBB- and maintained the stable outlook for Africa's most industrialised country but said politics posed a risk, strengthening the rand.
Ramaphosa says without consensus the country would have been in a different situation today.
"When the crunch hour came and we had to face the rating agencies, it kicked into gear, and today it has produced these results. We are not in junk status because of the consensus that's been built."
At the same time, Treasury said the decision by Fitch to keep its investment-grade credit rating showed that the country was an attractive investment destination and gave it time to implement economic reforms.
In its statement, Fitch said the BBB- rating reflected low trend GDP growth, significant fiscal and external deficits and high debt levels, which are balanced by strong policy institutions, deep local capital markets and a favourable government debt structure.
"The dismissal of two finance ministers in a week in December, and subsequent tensions between the new Finance Minister Pravin Gordhan and other parts of the government have raised questions about the commitment of the government to sustained fiscal consolidation and prudent governance of state-owned enterprises."
In March, the rand fell when the Hawks said it would launch an investigation into Gordhan's role in setting up a tax surveillance unit in 2007 when he was the commissioner of the South African Revenue Service.
Gordhan has said the spy unit set up at the tax agency was lawful.
However, last month, the Hawks said there was no investigation into the minister.
Gordhan had said earlier on Wednesday that he was "keeping his fingers crossed" in the countdown to a rating review by Fitch and called for more concrete action to revive the economy.
Additional reporting by Reuters.