Rating Agencies, Citizens Bemoan South Africa’s Economic Outlook

South African strikes

VENTURES AFRICA – Concerns of mainstream rating agencies about South Africa’s economic policies were similar to those of the country’s ordinary citizens, Iraj Abedian, the CEO of Pan African Capital Holdings, said on Tuesday.

This observation has the potential to show the ANC that complaints about its economic policies do not only come from rating agencies – something the ruling party seems to think.

Abedian, speaking at a breakfast meeting on Tuesday morning, implied that it was therefore pointless for the ANC to claim that the agencies have an agenda against the government.

“Ordinary people and pensioners in South Africa are asking the same questions that the rating agencies are asking. They want to know why new schools are not being built. Why is the education system so dysfunctional? The grannies believe that the economy cannot grow with a poor education system,” Abedian said, adding that it is a well-known fact that South Africa has a huge skills shortage.

Last week, Enoch Gondongwana, the head of policy in the ANC, said his organisation could ignore any advice coming from these rating agencies.

Many South Africans, including ANC leaders, think the downgrades by rating agencies are completely unacceptable and have an agenda of some sort.

Earlier this year, finance minister, Pravin Gordhan, who is also a member of the ANC, said South Africa disagreed with rating agency Moody’s downgrade of South African financial institutions.

“We disagree with the assessment. They are not giving us enough credit for managing our economy,” Gordhan said.

Gordhan said rating agencies were shown up for their “inadequacies” during the global economic meltdown of 2008. “They want to paint us with the same brush,” he said, referring to crisis in the Eurozone. This was soon after the credit rating agencies had cut the long-term credit ratings of six Eurozone countries including Italy and Spain.