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DA: Ratings downgrades should be wakeup call for government

On Thursday Fitch downgraded the country's credit rating to BB with a negative outlook, while Moody's dropped it to junk status last week.

FILE: Finance Minister Tito Mboweni. Picture: EWN

JOHANNESBURG – The Democratic Alliance (DA) said the recent downgrades by ratings agencies Fitch and Moody’s must be a wakeup call for the government.

On Thursday, Fitch downgraded the country's credit rating to BB with a negative outlook, while Moody's dropped it to junk status last week.

This means South Africa will have a hard time borrowing money and attracting investors.

The DA's Geordin Hill-Lewis said his is a chance for the governing African National Congress to make the right decisions that the agencies have been calling on them to make.

“I would hope that they focus now that they do all the things that the ratings agencies have spoken about; getting debt under control and that is going to require very difficult decisions in cutting expenditure and cutting the public wage bill.”

Hill-Lewis said government needs to send a positive message to potential investors.

“Real economic reforms – most pressingly Eskom and their energy monopoly. Break that monopoly and allow private power generation, that will be a hugely positive side to the world.”