- South Africa's credit rating has shifted from stable to negative according to Moody's
-The last ratings agency to hold SA in high esteem has noted the risk of the government failing to revive the nation's finances
- Finance Minister Tito Mboweni had seen this move coming and it seems the divine intervention he'd hoped for never materialized
Moody's Investors Service has shifted SA's credit rating to negative according to a statement issued on Friday.
Business Tech reports that the agency had taken the likelihood of a revival into consideration:
“While high unemployment, income inequality and the social and political challenges they imply for policymakers are long-standing features in South Africa, the obstacles that they pose to the government’s plans to raise potential growth and contain fiscal deficits are proving more severe than expected a year ago."
Moody's noted that the state's challenges are evident in the deterioration of growth trends and an increased public debt burden.
“Acute financial stress for state-owned enterprises (SOEs), in particular, Eskom, continues to require sizeable ongoing support from the government."
Briefly.co.za gathered that Eskom was a bone of contention for the agency, who urged the government to get the entity under control, warning of a debt-trap:
“In the last two years, it has become increasingly apparent that those constraints are challenging the government’s ability to implement reforms that would durably lift growth, to an even greater extent than previously expected."
Finance Minister Tito Mboweni had seen the writing on the wall ahead of the announcement, calling for prayer hopeful that divine intervention would materialize:
"At the most, I hope they ( Moody's) keep the rating where it is. But I will ask the ACDP to help me in prayers, it is not looking good. But we will keep their prayers."
Enjoyed reading our story? Download BRIEFLY's news app on Google Play now and stay up-to-date with major South African news!