Moody’s explains why it didn’t junk South Africa, and why it may next time

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.

The Money Show’s Bruce Whitfield interviewed political economist Nic Borain.

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

Enjoy The Money Show, but miss it sometimes?

Get the best bits emailed to you daily, right after it ends:

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : Moody’s explains why it didn’t junk South Africa, and why it may next time


Recommended

by NEWSROOM AI
Read More
[NEW IN SOUTH AFRICA] Download ‘what3words’. The app may just save your life

[NEW IN SOUTH AFRICA] Download ‘what3words’. The app may just save your life

what3words divides the whole planet into three by three-metre blocks. If you get lost or hurt; help will find you.

How to take over (or pass on) the family business

How to take over (or pass on) the family business

The Money Show’s Bruce Whitfield interviews small business guru Pavlo Phitidis, founder of Aurik Business Accelerator.

Be careful who you tie your fortunes to

Be careful who you tie your fortunes to

A business partner can make you. Or break you. The Money Show’s Bruce Whitfield interviews small business guru Pavlo Phitidis.

How to get deals done faster

How to get deals done faster

The Money Show’s Bruce Whitfield interviews Pavlo Phitidis, founder of Aurik Business Accelerator.

Blueberry production – and employment - skyrockets to all-time high

Blueberry production – and employment - skyrockets to all-time high

In 2014, 1000 people had blueberry jobs. By 2023 it could be 26 000. Bruce Whitfield interviews the industry's Sean Tager.

Old Mutual ups the ante in its bitter battle with Peter Moyo

Old Mutual ups the ante in its bitter battle with Peter Moyo

Bruce Whitfield interviews Peter de Beyer (Old Mutual Non-Executive Director) and Karl Gevers (Benguela Global Fund Managers).

Popular articles
[LISTEN] SA's Ndlovu Youth Choir through to America's Got Talent semi-finals

[LISTEN] SA's Ndlovu Youth Choir through to America's Got Talent semi-finals

The choir has been wowing TV audiences in the US and across the world with their energetic performances.

Surfer comes up with insp-EYE-ring way to ward off sharks - take a look!

Surfer comes up with insp-EYE-ring way to ward off sharks - take a look!

Large eye stickers are being stuck to the bottom of surfboards in order to deter sharks.

'Ramaphosa wants to find ways to force pension fund managers to invest in SOEs'

'Ramaphosa wants to find ways to force pension fund managers to invest in SOEs'

Daily Maverick associate editor at Scorpio Sikonathi Mantshantsha takes a look at the week's financial news.

Lion cub worth R50k rescued from house in Cape Town

Lion cub worth R50k rescued from house in Cape Town

The feline was found by detectives at a property in Athlone on Wednesday following a tip-off.

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

The inspiring South African choirU2's Beautiful Day at America's Got Talent quarter-finals.

SA’s richest woman opens up about being a refugee and becoming a billionaire

SA’s richest woman opens up about being a refugee and becoming a billionaire

Magda Wierzycka – Sygnia’s renegade CEO – on her attitude toward money (hopes and fears, successes and failures, etc.).

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

The reason for the leakage has been revealed, explains Table Mountain Aerial Cableway MD Wahida Parker.