South Africa woke up to unpleasant news that rating agency Standard & Poor’s (S&P) has downgraded the country's credit status to sub-investment grade, commonly known as junk status.
On Tuesday Moody's said it will not issue its credit rating decision on South Africa this Friday, as previously scheduled, but will do so in the next 30 to 90 days.
Head economist at Econometrix Dr Azar Jammine says he thinks Moody's may at this point be taking some time to analyse what the Cabinet reshuffle would mean for economic policies.
He adds they may well want to see what the new Finance Minister has to offer and whether it will constructive or destructive for the countries fiscal strength.
Malusi Gigaba replaced Pravin Gordhan as Minister of Finance after President Jacob Zuma fired Gordhan and his deputy Mcebisi Jonas.
I do believe that they are waiting to see what is going to happen with the President because if the President were to step down right now the scenario would change quite dramatically and it will be filled with an era of optimism which we haven't seen in a long time.— Dr Azar Jammine, Head economist at Econometrix
Jammine says the trail of events that led to Gigaba's appointment doesn't give much hope in his ability as the new finance minister.
He can have that economic transformation if he incurs massive savings on corruption and wastage. But given Gigaba's image, I don't believe that people will give him much hope of doing that.— Dr Azar Jammine, Head economist at Econometrix
Adrian Gore, Business Leadership SA board member, described the downgrade to junk status as catastrophic and unnecessary.
We have to express our concerns and be clear about accountability. We have to focus on building the country and make an appeal to the President and the ruling party...— Adrian Gore, Business Leadership SA board member
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