Standard and Poors has downgraded South Africa to "sub-investment grade".
News 24 reports that that the S&P downgrade reflected its view that the divisions in the ANC-led government have led to changes in the executive leadership.
It says the decision by Standard and Poors came in the wake of last week's cabinet reshuffle which saw the axing of Pravin Gordhan and Mcebisi Jonas from the Finance Ministry.
"Standards and Poor (S&P) has downgraded South Africa to junk - South Africa Long-Term Foreign Currency Rating was cut To 'BB+’ based on political and institutional uncertainty, meanly a outlook negative said Dennis George FEDUSA General Secretary.
He said the downgrading was blamed on the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.
George said that S&P had said that the contingent liabilities to the state are rising, therefore the rating agency has therefore decided lowering our long-term foreign currency sovereign credit rating on the Republic of South Africa to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB’. Moreover, the negative outlook reflects the view that there is at least one in three probability that budgetary performance, debt levels, and economic growth will deteriorate beyond our current baseline expectations.
He said S&P also lowered the short-term foreign currency rating to 'B' from 'A-3' and the short-term local currency rating to 'A-3' from 'A-2'. The outlook on all the longterm ratings is negative.
Earlier on Monday South Africa’s opposition parties said they would embark on a national march to the Union Buildings next week as part of their ongoing efforts to remove President Jacob Zuma from power.
Leaders of the Democratic Alliance (DA, the United Democratic Movement (UDM), Inkatha Freedom Party IFP, United Christian Democratic Party (ACDP), Congress of the People (Cope) and the Economic Freedom Fighters (EFF) held a meeting in Johannesburg.
DA leader Mmusi Maimane said the parties coming together to remove Zuma after the highly criticised Cabinet reshuffle last week that removed Pravin Gordhan and Mcebisi Jonas from their posts as minister and deputy of finance, was not about the governing African National Congress (ANC), but its leader and country’s head of the executive, Zuma.
“What we are saying in the short term, is that we are working to remove Zuma. All of us are fully behind [a] motion of no confidence against Zuma. This is not an academic exercise…we’re serious about this, this is why we came together collectively because we choose South Africa,” Mmusi said.
“This motion is not about the removal of the ANC…the ANC was voted into power by the majority of people of this country and through a democratic process which all of us respect…this is not a regime change, it is the removal of one man from power as a result of the crisis he keeps unleashing in this country.”
