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No downgrade from Moody's - here's one analyst's reason why

27 May, 02:10 PM

Analyst Justice Malala believes the Constitutional Court judgment on non-security upgrades to Nkandla influenced Moody's rating decision weeks ago.

Speaking at a State of the Nation breakfast in Cape Town on Friday, the political commentator and author of We Have Now Begun Our Descent, argued the independence of institutions like the judiciary and South African Revenue Services (SARS) was essential for rating agency's confidence.

Meanwhile Fitch Rating's analytical head for the Middle East and Africa Jan Friederich credited Minister of Finance Pravin Gordhan with generating stability.

"It was calming for the markets that Gordhan was appointed, he is a safe pair of hands," said Friederich (more here).

Malala asked hundreds of guests at a State of the Nation breakfast, "Why didn't Moody's downgrade South Africa? Why did they feel the need to hold back?"

He argued the emphasis for them was on the Constitutional Court judgment on Nkandla. A full bench ruled President Jacob Zuma was liable for a reasonable portion of the cost of non-security features at his homestead, Nkandla.

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