Latest Moody's downgrade and COVID-19 'paint bleak picture for SA economy'
Moody’s downgrade of South Africa to full sub-investment grade rating and the impact on the economy of the COVID-19 lockdown will have dire consequences for South Africa.
Newly appointed University of the Free State chancellor Bonang Mohale has written an article in the _Independent Media _where he says South African must embark on urgent structural economic reforms.
In the article Mohale gives the consequences of latest downgrade and the coronavirus pandemic will be to the country.
Speaking to Eusebius McKaiser, Mohale says the downgrade means the country will pay a premium on its current debt.
A lot of fund managers who are not allowed to be in countries that are sub-investment grade will have to pull out of the country, which may prompt investors to further dump as much as R100 billion of South Africa's assets, leading to a weakened rand.Bonang Mohale, Chancerllor - University of Free State
The cost of borrowing will rise for citizens and for the government, he says.
We need to send signals to the outside world that South Africa is open for business. We must reduce our bloated public sector wage bill. We need to deal decisively with the R400 billion Eskom debt. The economy must be broadly reflective of the demographics otherwise the poor will have nothing to lose and they will start burning libraries.Bonang Mohale, Chancerllor - University of Free State
Listen below to the full conversation:
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