Nafcoc is extremely concerned at at Standard and Poor decision to down grade South Africa Sovereign rating.  The impact of downgrade will reduce the country fiscal space and will make debt much more expensive particularly the debt that is denominated in Foreign  currency.  This may mean that the country ability to scale up investment in infrastructure and service delivery will be  impacted negatively. This may in turn undermine the growth and transformation targets of South Africa.

Our view is that it bears no purpose to deliberate on the motive or otherwise S&P suffice to say that this action was not totally unexpected.

Nafcoc, believes this is a time for South Africa to draw on their resilience and  to restore the business confidence, pursue policies that will lead to higher growth and increase private sector involvement. This must be done at the back of fiscal policies that have already been initiated.

In this regard Nafcoc will initiate dialogue with the government and other stakeholders to re-energize and sustain Economic Transformation project.

We are of the firm view that South Africa fundamentals are still sound. The recent monetary policy statement have  confirmed this fact. The fledging global economic growth is further cause for optimism. We therefore call on government not yield into the temptation of reversing some of the transformation initiatives aimed at SMME and black economic empowerment in the light of this ratings challenges.

The action by S&P must also cause all those charged with governance to reflect very deeply in the way they conduct themselves ad the manners they exercise Leadership.

 

Issued by Nafcoc