Johannesburg - President Jacob Zuma’s policy missteps at the end of last year may be the catalyst that pushes the government to implement reforms needed to avert a credit rating downgrade to junk, according to Standard Bank.
"The events of December may have been the cathartic experience that South Africa needed,” Standard Bank economist Goolam Ballim said in Johannesburg on Tuesday. “It has dawned very heavily on the authorities that the risk of falling into sub-investment grade looms very perilously large.”
The rand went into free-fall and bond yields soared after Zuma unexpectedly fired Finance Minister Nhlanhla Nene on December 9 and replaced him with a little-known lawmaker. He was forced to backtrack four days later, reappointing Pravin Gordhan to a post that he’d occupied from 2009 to 2014.