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EFF: Fitch’s decision to downgrade SA is due to Zuma’s stupid reshuffling

On Friday, Fitch said it was dropping South Africa’s status to below investment grade because it believed economic policy was about to change.

President Jacob Zuma at the Local Government Summit in Midrand. Picture: Kgothatso Mogale/EWN

JOHANNESBURG – The Economic Freedom Fighters (EFF) says Fitch’s decision to downgrade South Africa to junk status, is a clear demonstration that President Jacob Zuma has driven the country deeper into an economic crisis.

The party says the economic state of the country is far worse than what it used to be before Zuma took office.

On Friday, Fitch said it was dropping South Africa’s status to below investment grade because it believed economic policy was about to change.

It changed its rating to 'BB+' from 'BBB-', with the outlook stable.

The ratings agency is the latest to downgrade South Africa to junk status after Standard & Poor’s Global also downgraded the country to junk status earlier this week.

The EFF’s Mbuyiseni Ndlozi say, “He must be removed because we’re here because of his unreasonable stupid reshuffling of three finance ministers in less than three years.

“So this is what has put us here and that’s why he must be removed as a matter of national urgency and emergency.”

In Fitch’s view, the Cabinet reshuffle, which involved the replacement of the finance minister, Pravin Gordhan, and the deputy finance minister, Mcebisi Jonas, is likely to result in a change in the direction of economic policy.

The reshuffle partly reflected efforts by the outgoing finance minister to improve the governance of state-owned enterprises (SOEs). The reshuffle is likely to undermine, if not reverse, progress in SOE governance, raising the risk that SOE debt could migrate onto the government’s balance sheet.

Differences over the country’s expensive nuclear programme preceded the dismissal of a previous finance minister, Nhlanhla Nene, in December 2015 and in Fitch’s view may have also contributed to the decision for the recent reshuffle.

CALL TO HAVE ZUMA REMOVED

Meanwhile, the EFF says African National Congress (ANC) members are welcome to join them in a protest against Zuma at the Union Buildings in Pretoria next Wednesday.

The EFF together with other six opposition parties including the Democratic Alliance (DA), Congress of the People, Inkatha Freedom Party, and the United Democratic Movement, will march from Church Square in the capital, calling on the president to step down.

The country saw mass demonstrations on Friday following the president’s cabinet reshuffle, where former Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas were axed.

Ndlozi says, “All members of the ANC as well are invited to come and join because this is not a call to remove the ANC, it’s a call to remove one individual who’s at the infant stages of dictatorship.

“Let us unite against Zuma and his Gupta plan to take the country for his personal profit and corruption.”

FINANCE MINISTRY DISAGREES

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 Gordhan and replaced him at the finance ministry with 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 said 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 said 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 said 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.

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