Guest Column

Junk status: should I stay or should I go?

2017-04-09 06:13
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Emma Waldorf

All the negative things happening in our beloved country have caused a stirring among our public, a stirring that finds all South Africans, regardless of ethnicity, age, class or social structure, coming together in unity.

And it’s about time.

There have been many events in the recent past that have angered South Africans, that caused uproar, caused an unstable economy and a fluctuating rand.

South Africans have had enough.

We are seeing a movement growing so fast that some believe it could be one of the biggest since 1994.

What does the Cabinet reshuffle, the firing of finance minister Pravin Gordhan and the credit downgrade mean for the average South African?

To start, there are essentially no immediate or short-term effects, but the long-term effects are never-ending.

Firstly, we saw President Jacob Zuma reshuffle his Cabinet and get rid of Gordhan, even though many economists and even ANC MPs were against it, knowing full well the adverse effects it would cause.

Once that announcement was made, it was simply a waiting game on the credit agencies to announce South Africa’s credit downgrade to “junk” status.

This downgrade will have long-term effects on our economy, as a whole, and to the average South African, these are the effects we will experience:

- Higher interest rates; this will make it harder for families to pay off their vehicles and home loans.

Increase in risk premium; lending companies will increase their rates as they would believe there to be a greater risk of nonpayment or defaults. This means if you own assets and investments, you will be directly affected; your net worth will inevitably decrease.

- There will be lower access to credit and an increase in interest rates, causing difficulty for South Africans to lend/loan money.

- The rand will possibly decrease in value even more, causing a rise in pricing of imported goods and this will cause a decrease in foreign investment. If the rand continues to decrease, inflation will escalate, and this will increase petrol and food prices, making it impossible for you or me to live a comfortable life.

As one of Africa’s leading countries, we cannot afford to lose international investors or business, we cannot afford higher costs and an unstable rand – we need change.

We are quickly becoming like many other African countries and that scares us.

At Compass Migration, we have seen an increase in skilled and educated professionals enquiring about living abroad.

Most of these enquiries come from scared, frustrated and fed-up families.

These people believe that there is no future in South Africa, no future for their investments, no future for them in the workforce.

We cannot blame those who want to get out of here. They are only thinking of their careers, their children and their uncertain futures in South Africa.

Luckily, for those who are seeking a life abroad, Australia and Canada are currently accepting skilled professionals into their workforce.

These countries have been hailed as economically stable, secure and supportive.

Not only is there a shortage of workers there, providing many gaps in the working industry, but the government promises to look after you by providing free medical aid, free education for your children, and social benefits such as pension and housing allowances.

While we love our country, we cannot live with uncertainty.

Therefore, we are trying to assist as many people as we can, because the ones who have educated themselves and invested their time into this country want to see a return as well.

They need to be able to provide for their families and at the same time feel secure in their environments.

Waldorf is a senior immigration consultant at Compass Migration

Read more on:    jacob zuma  |  cabinet reshuffle
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