South Africa’s downgrade by Fitch Ratings agency is a vote of no confidence in new Finance Minister Malusi Gigaba’s ability to hold the fiscal line and stabilise debt, the DA’s David Maynier has said.
“This should come as no surprise given that the minister is trying to convince the ratings agencies that he can hold the fiscal line and implement ‘radical economic transformation’, which is simply not credible,” he said on Saturday.
Earlier this week, S&P downgraded SA to junk status. On Friday, Fitch Ratings followed suit.
Fitch downgraded South Africa’s long-term foreign currency debt and long-term local currency debt to BB+, or “junk status”, with a “stable outlook”.
Maynier said it was not good enough for the minister to simply concede that the ratings downgrade was a setback.
“The minister needs to roll up his sleeves and get into the fight to avoid further ratings downgrades. The minister’s number one priority should be to avoid the nightmare scenario where massive forced selling of our debt triggers an economic meltdown that will spare nobody, rich or poor.”
Maynier said that to re-establish trust with the ratings agency, the minister, who was sworn in on Friday, March 31, had to show that he was serious about avoiding further downgrades.