Business Unity South Africa said ratings agency Moody’s recent outlook on South Africa’s sovereign rate is alarming.
Moody’s has decided to keep the country one notch above sub-investment grade, changing its outlook on the country’s credit rating from stable to negative.
Busa president Sipho Pityana said they warned months ago that the country needed drastic and fundamental action on key economic issues.
Meanwhile, opposition party the Democratic Alliance said this shows that Finance Minister Tito Mboweni’s Medium-Term Budget Policy Statement did not go nearly far enough in getting debt under control and reining in the budget deficit.
The DA’s Dion George explained: “As we saw from minister Mboweni’s speech, he spoke two ways. He said the right things, but if you look at the numbers over the next three years, you’ll see absolutely nothing has been done to improve it.”
Mboweni has acknowledged Moody’s rating with a heavy heart, saying he had hoped for a different outcome.
“Fellow South Africans, now is the time to roll up our sleeves and do what we have to do. It’s now or never. We need all hands on deck. Government, labour, business and civil society, we need each other now more than ever. The country is ours and it is only us who can turn it around.”
Moody’s said South Africa’s economic growth was deteriorating and showed no signs of improvement.
Treasury has reacted with an assurance that it’s working towards lifting growth and returning public finances to a more sustainable path.
It said the government made progress on several measures, including the visa regime to support tourism, approving the integrated resource plan for desired energy and releasing the telecommunications policy directive.
Treasury said the government was fully aware that short and medium-term reforms were urgently required to improve economic performance over the next several years.