The event-risk is an attempt to change Eskom in a manner that sets off a catastrophic labour response… It’s a difficult and scary moment for us… They rate it as a very serious risk…— Nic Borain, political economist
Moody’s will come down on us like a ton of bricks if we don’t find ways to increase generation or, at least, get the private sector involved in generation at Eskom.— Nic Borain, political economist
Moody's Investors Service on Friday announced that it’s not downgrading South Africa’s sovereign rating.
Uncharacteristically, it left it at that.
On Monday, however, it released a detailed report into the country’s credit rating.
Moody’s decided to cut South Africa some slack because of its “diversified economy, a sound macro-economic policy framework and a deep pool of domestic investors”.
The agency rates South Africa’s fiscal strength as “moderate" and its susceptibility to event risk as “low”.
It expects economic growth of 1.3% this year.
Moody’s is worried, however, about rising government debt and the country’s ailing state-owned companies, chiefly Eskom.
Listen to the interview in the audio below (and scroll down for more quotes from it).
All of them [rating agencies] have a very strict and reproducible methodology…— Nic Borain, political economist
They said that not enough has changed in the metrics they look at to change either the outlook or the review…— Nic Borain, political economist
They did not quite say things didn’t get worse… Many of the figures are worse than expected. But the metrics are not different from other countries [with the same rating as SA]…— Nic Borain, political economist
It’s suspected that Moody’s are encouraging us politically. They will deny it… They’ve gone for a wait-and-see view…— Nic Borain, political economist
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