'Moody's downgrade during COVID-19 means government needs to think differently'
Last Friday, Moody's joined the other two major international ratings agencies by downgrading South Africa's sovereign credit rating to junk status.
It downgraded the country one notch to BA-1 from BAA3 and maintained a negative outlook.
Government says the downgrade "could not have come at a worse time" as South Africa battles to contain the spread of COVID-19.
Bongani Bingwa speaks to Wits University School of Economics and Business Science senior lecturer Lumkile Mondi and National Treasury Asset and Liability Management acting deputy director Tshepiso Moahloli to give their take on the downgrade.
The downgrade by Moodys opens up a new debate to shape the South African state of the 21st century so that we can bring people into the mainstream economy and address their marginalisation.Lumkile Mondi, Senior lecturer - Wits University School of Economics and Business Science
He says South African leaders have served in the interests of themselves instead of the the interest of the people.
They want to be seen as doing very well while our people have been struggling. Now that we are here, we need to think forward, the current thinking of Treasury, the Reserve Bank and the African National Congress has to change. The pandemic means we need to think differently as each country is doing so. There is no need for South Africa to go and borrow money from the International Monetary Fund (IMF).Lumkile Mondi, Senior lecturer - Wits University School of Economics and Business Science
Moahloli says she believes there is definitely going to be a new world after COVID-19 and Treasury needs to look at what has been proposed and what the world looks like post COVID-19.
The biggest challenge of South Africa is the implementation of the ideas it comes up with. What the virus is telling the government to go back to basics. Basic housing and basic sanitation is needed for people.Tshepiso Moahloli, Acting deputy director - National Treasury Asset and Liability Management
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Listen below to the full conversation:
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