By Mzomuhle Msomi
Let’s assume for a second that there are no political agendas behind this downgrade. That this downgrade comes from a genuine place of worry. Let’s also assume that the moral fibre of the agencies issuing said downgrade is not questionable.
Is a junk status something to worry about? Yes!
Should we have anticipated? Yes!
Will it have a negative impact? Yes!
Are we politically unstable? Yes!
Now that we’ve ironed out the basics let’s get to the assessment. In my view I doubt that the cabinet reshuffle had much of an impact on our junk status(assuming no agendas). I think one of issues is the strategic outlook of the head(Honourable Jacob Zuma). The president on numerous occasions has committed the country to Radical Economic Transformation and Land Expropriation. Which I support unapologetically and unreservedly. However such utterances(in my view) create instability for foreign investors who apparently control a sizeable portion of the economy. Picture having investments in a foreign country and one day the president pronounces that he is implementing radical economic transformation, you would be worried about your investment right? You’d want reassurances that your investment and income generating ability wouldn’t be effected? But such assurances can’t be given cause Radical Economic Transformation is emancipation ” by any means possible”, so investor confidence can never be assured, if it is then Radical Economic Transformation becomes a false rhetoric. Assurance can’t be made to the investors cause they aren’t the priority anymore so essentially you have started to dismantle the neo-liberal system in ideology.
To add to this issue, opposition is having a field day and sees power as a low hanging fruit. Say what you will but 3 attempts at a vote of no confidence in about 3 years is politically reckless. The impression of political stability is driven by opposition more than an incumbent party. What certainty do you then have when opposition feel they can collapse the government any day? What do you feel the impact would be on your investment? Is the investment worth it?
Given the Presidents intention of Radical Economic Transformation, anything more than a downgrade would be an indication that Radical Economic Transformation is a false narrative to sell dreams and secure votes. Do you think rating agencies reward countries with an intention to seize land and the economy, with good credit ratings? Please!!
Now our backs are against the wall. Do we as a society urge the president to abandon this Radical Economic Transformation? Do we crawl back to our economic handlers and beg for forgiveness and pledge to obey them going forward? Do we abandon the land cause of a flimsy economy we don’t own?
If the President still promises economic emancipation and land, I continue my support of him.
Angijiki!!
You too should make your decision!!!!
