25 November 2017
STATEMENT BY CAS COOVADIA, MD OF THE BANKING ASSOCIATION SOUTH AFRICA
The decision by S&P to downgrade South Africa’s long-term local currently rating, and our long-term foreign currency debt has serious consequences for the poorest of the poor in our country with a catastrophic impact on our country’s economic prospects.
While S&P did move South Africa from negative watch to stable – the agency noted that economic policy in our country is currently focused on redistribution and not growth, which has caused it to stagnate.
Fiscal policy needs to be adjusted to make the hard decisions that drive competitiveness and growth. Political meddling in our institutions and continued bailouts of non-performing SOEs is wreaking havoc on our economy.
Our country needs a clear, stable and certain policy to generate economic growth. We repeat our call that it is imperative that the ANC emerge from its elective conference with a new leadership that grasps this urgency and is committed to placing our economy on a path of growth, competitiveness and inclusiveness.
Anything else will accelerate the downward spiral of declining confidence, reduced investment, slower growth, weaker public finances and greater inequality. We can no longer afford to do nothing.