Covid-19: Brand South Africa notes challenges ahead after Moody’s downgrade
JOBURG – 'We must prioritise the lives and livelihoods of our people above all else and will use all of the measures that are within our power to protect them from the economic consequences of this pandemic.'
Brand South Africa has appealed to South Africans to continue to drive efforts to fight against this invisible enemy, coronavirus.
At this time of national mobilisation, where the frontline of the fight against the virus is potentially everywhere, Brand South Africa noted with concern the announcement by Moody’s Investors Service to downgrade South Africa’s long-term foreign-currency and local-currency issuer ratings to Ba1 from Baa3.
“The key driver behind the rating downgrade to Ba1 is the continuing deterioration in fiscal strength and structurally very weak growth, which Moody’s does not expect current policy settings to address effectively. Both outcomes speak to weaker economic and fiscal policy effectiveness than Moody’s previously assumed,” Moody’s said.
Brand South Africa, however, noted that while the downgrade will have an impact on the country and economy in the midst of dealing with the local manifestation of a global pandemic, it echoed the words of the Minister of Finance. “It is with a heavy heart to note that all three major credit rating agencies currently rate South Africa at sub-investment grade. However, every crisis presents an opportunity. The opportunity we have today is to unite and work together to address our challenges. We as a people have overcome insurmountable challenges in the past and we can still overcome. We shall rise. We have to rise. We owe it to ourselves,” said Minister of Finance, Tito Mboweni.
With this in mind, the moment of crisis faced by the country is a call to action. It means, as we all hope, that by the time the Covid-19 pandemic has subsided – with minimal South African impact – the South African journey of development, transformation, and internal entrepreneurial development will be intensified.
General manager for research at Brand South Africa Dr Petrus De Kock said, “The country is not alone in fighting this pandemic, while it is still too soon to tell what the extent of the long-term impact will be on both the global and our national economy, the recent interventions implemented by both government and business to protect the economy and citizens will go a long way in cushioning our economy.”
As South Africa grapples with both the pandemic and its economic impact, this crisis is a loud and clear call to action for renewed creativity and resilience to rebuild society and the economy in the medium to long term. It is with this in mind that Brand South Africa wished to reiterate their commitment to building the country’s brand reputation and improving its global competitiveness.
“When the country exits from the Covid-19 pandemic, the competitive advantages, strong infrastructure, and positioning as member of the African Continental Free Trade Area, G20, Brics, and a host of critical global multilateral institutions will enable the country to strike new relationships, and find new opportunities to recover lost ground due to the credit rating downgrade and Covid-19 pandemic.”
De Kock concluded, “We reiterate President Cyril Ramaphosa’s call, that the cost of not acting now would be far greater. We must prioritise the lives and livelihoods of our people above all else and will use all of the measures that are within our power to protect them from the economic consequences of this pandemic.”
