Tick: Tito Mboweni presented his economic plan and the ANC’s national executive didn’t blink. With the clock ticking down to M-Day — Finance Minister Tito Mboweni’s medium-term budget on October 30 or Moody’s credit rating review on November 1 — at least one high-profile pundit is predicting a downgrade.
Investment bank Renaissance, in a view at odds with the majority surveyed by Bloomberg, is predicting we will be junked. The prediction has standing because Renaissance has got the last eight out of nine sovereign ratings decisions in emerging markets correct since May.Renaissance global chief economist Charles Robertson, quoted by Bloomberg, said South Africa’s fundamentals had deteriorated since May, when Moody’s maintained its investment grade rating.
Robertson pointed to poor growth, problematic public finances, a subdued commodity outlook, xenophobic rioting and questions about President Cyril Ramaphosa’s ability to implement tough economic reforms because he is constrained by his tenuous hold on a deeply divided ANC, and he faces opposition from union allies who, fearing job losses, oppose privatisation.
This assessment, though, may be overreach, based on the way Mboweni’s economic reform document passaged through the highest ANC structures.