Moody’s acquisitions are a setback for the development of alternative rating agencies to compete against the monopoly of the ‘big three’.
The legitimacy of SWAPO, the former liberation movement that has governed since 1990, has been eroded amid growing corruption and a deepening economic crisis.
African governments must engage rating agencies better, providing them and investors with credible economic data, and regularly address all concerns being raised.
Downgrades have a devastating effect on economies that are already strained. The decision to downgrade during a crisis like the coronavirus pandemic must be challenged.
Rating agencies continue to be found wanting, primarily because of their business model where the institution being rated pays. This brings about a conflict of interest which is not easy to resolve.
An ideological debate is desperately needed to sort out options South Africa could pursue to find a way out of its economic morass.
The ratings agency downgrade decision is not a surprise. It’s a wake up call. South Africa has its work cut out.
The best chance South Africa has of recovering from sub-investment grade credit rating status is to have leaders who are prepared to break rank with the small-mindedness of the ruling party.
The focus will now be on how the social democratic and left-leaning members of South Africa’s cabinet – the “constitutionalists” – will respond to the reshuffle.
South Africa is breathing a sigh of relief after escaping a credit rating downgrade. But there are still serious concerns around structure of the country’s economy and finances.
South Africa has made some progress in fixing problems identified by ratings agencies. But there are a number of outstanding issues that might mean the country is given ‘junk’ status.
South Africa’s response to the country’s economic woes has amounted to little more than band-aid treatment. Government must do more to set the economy on a solid growth path.