In a tweet sent in the small hours of Friday, at around 3.30am, Public Protector Busisiwe Mkhwebane described global ratings agencies in the same breath as “oppressors of the downtrodden”.
She asked God to deliver the country from them.
Ratings agency Moody’s is the last of the big three agencies to keep SA at investment grade, with Standard & Poor’s and Fitch both already downgrading SA to “junk” about two years ago.
God deliver us from these rating agencies and oppressors of the downtrodden for economic freedom in our lifetime and generations to come.
— Adv Busisiwe Mkhwebane (@AdvBMkhwebane) November 1, 2019
The rand weakened as much as 1.2% against the dollar after Finance Minister Tito Mboweni said the pending rating review from Moody’s Investors Service that is expected today was “not looking good.”
Mboweni surprised investors in his medium-term budget statement on Wednesday with how bleak the economic outlook looks to be, with gross government debt expected to surge to 80.9% of gross domestic product in 2028 unless urgent measures are implemented.
Mboweni said the national debt is expected to balloon from R3 trillion to R4.5 trillion in the next three years.
If Moody’s were to downgrade SA, there would be enormous financial consequences for the country as it would automatically fall out of the FTSE World Government Bond Index. The resultant investor selloff would cause estimated financial outflows of $15 billion, reports Bloomberg.
“A downgrade would also raise borrowing costs, complicating the government’s efforts to balance the budget.”
Moody’s has twice skipped publishing a review of South Africa, and government will be hoping that it will decide to do so again.
Mkhwebane’s tweet received both support and condemnation on Friday, with her supporters, among other things, pointing to the complicity of the big ratings agencies in the global financial market collapse of 2008. Her critics, however, pointed out that state corruption and inefficiency have been at the heart of the country’s financial woes, not credit ratings, and that she should be praying for deliverance from that instead.
Others simply viewed her tweet as embarrassing.
Earlier this year, she claimed in a speech to the SA Sheriff’s Society that she was placed in her position by God and that only God could remove her.
(Compiled by Charles Cilliers)