Mcebisi Jonas: SA must preserve its sovereign credit rating
The deputy finance minister says preserving the rating at two notches above sub investment grade is important.
JOHANNESBURG – Deputy Finance Minister Mcebisi Jonas says the country must preserve its sovereign credit rating not only in the interest of white capital but also for the poor.
Jonas was speaking at this year’s Association of Black Securities and Investment Professionals Conference in Sandton this morning, under the theme “Economic Transformation For Social Change”.
Ratings agency Moody's is due to review South Africa’s credit rating by the end of this month.
Jonas says preserving the rating at two notches above sub investment grade is important for the country.
“If we’re downgraded, we know for the fact that our cost of borrowing will probably triple if not higher. And that has huge implications on our social spending on some of the programmes we’re driving as a country.”
Meanwhile, South Africa’s chances of avoiding a credit rating downgrade will be boosted by a recent wage agreement between mineworkers and the platinum sector’s largest producers, Moody's said on Monday.
“The agreement is credit positive for both South Africa and platinum mining companies because it avoids a strike and the loss of platinum production,” the agency said in a credit analysis.
Moody's rates South Africa’s debt at Baa2, two notches above sub-investment grade, with a negative outlook, and it is due to make its next ratings decision by the end of November.
(Edited by Leeto M Khoza)