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The DA will be writing to the Chair of the Standing Committee on Finance to request that the committee sets up an inquiry into the deterioration in South Africa’s sovereign credit rating, the effects it will have on the economy, and government plans to prevent any further decline.
Yesterday, Moody’s downgraded South Africa’s sovereign credit rating by one notch from an A3 rating to a Baa1 rating. They attribute their downgrade to a series of governance failures and take the view that the government has a diminished capacity to deal with its political and economic challenges.
This move will increase South Africa's cost of borrowing on international capital markets; cost increases that will ultimately be funded by taxpayers. This means that the ANC government's mismanagement of our economy is now starting to hit South Africans in the pocket and acting as a drag on our already lagging economy. In short, it is the last thing we need.
With less than a month to go until the Medium Term Budget Policy Statement this development could have a negative impact on the cost of our public debt and constrain the fiscal space available to National Treasury. Parliament needs to hold government to account on this downgrade, work out what has led to this development, and press the state to table urgent plans to prevent any further credit rating downgrades.
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