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Finance ministry ‘disagrees’ with Fitch’s findings

Fitch says it downgraded SA rating to below investment grade or junk because it believes President Zuma's reshuffle will lead to a change in economic policy.

Finance ministry's Mayihlome Tshwete seen with Finance Minister Malusi Gigaba. Picture: facebook.com.

JOHANNESBURG - South Africa has been downgraded to junk status by yet another ratings agency.

Ratings agency Fitch says its downgraded rating to below investment grade or junk because it believes President Zuma's reshuffle will lead to a change in economic policy.

It also says it’s worried specifically about government’s proposed nuclear deal.

On Monday, S&P Global ratings became the first agency to cut the SA rating to junk status, after Zuma removed Pravin Gordhan and replaced him at the finance ministry with Malusi Gigaba.

The finance ministry's Mayihlome Tshwete says they don't agree with all of Fitch’s findings.

“Typically that the executive change will lead to possible policy changes. The minister has been at great pains to reiterate that the policy trajectory of the department is not going to change.”

But economist Xhantyi Payi says the agencies had warned that this would happen.

“We’ve actually walked into what they thought and had indicated would be contributors to a downgrade.”

The fact two ratings agencies have now cut the rating to below investment grade could lead to South Africa dropping out of some global bond indexes, and thus force some international funds to sell their stocks here.

LEADERS REACT TO LATEST DOWNGRADES

Leaders of the march against Zuma in Pretoria say South Africans need to wake up and realise Zuma is to blame along with his corrupt stooges.

Save SA convener Sipho Pityana says South Africans must realise that President Zuma is an ambassador for corruption and that the country will only become a joke under his leadership.

“We’ve got to get rid of this president until we do that nobody would believe that we’re serious about restoring good governance and making sure that we reverse some of the nonsense that’s going on.”

The South African Communist Party (SACP)’s Solly Mapaila says under Zuma’s leadership there is no hope.

“He’s handed over the sovereignty of our country to the Guptas. We mandated him to lead through the elections, now he has abdicated his responsibilities. Because of that we can no longer have confidence in him on the basis of who takes decision for the interest of our public.”

Earlier on Friday, Democratic Alliance leader Mmusi Maimane told those gathered at the Union Buildings that South Africa is not a junk country, but it's a country with a junk president.

‘ANC NOT WORRIED ABOUT ANY JUNK STATUS’

ANC Youth League leader Collin Maine says the African National Congress (ANC) is not worried about any junk status and says if the economy falls, they will wait for it to rise again.

Maine was briefing ANC supporters outside the ANC’s headquarters on Friday afternoon.

Members of the MKMVA and the party's supporters gathered outside the ANC headquarters saying they are defending the president and the ANC against those who want regime change.

“We’re here to tell everyone that Zuma is going nowhere until 2019. We support the removal of Pravin Gordhan. He has not been serving the people of South Africa but a friend of capital.

A supporter said: “The outcome of Luthuli House is to defend the radical economic transformation that’s being led by President Zuma. But also to show the world that we’re not going to allow the people who want regime change undemocratically.”

(Edited by Zamangwane Shange)