Like it or not, South Africa is part of a global economy and therefore, subject to global rules. Wishing it were otherwise won’t make it so, says Mundia Kabinga.
So, the worst has finally happened. After months of uncertainty, ratings agencies S&P and Fitch officially downgraded South Africa to junk status following the ill-timed Cabinet reshuffle that saw fnance minister Pravin Gordhan and his deputy Mcebisi Jonas, among others, unceremoniously shown the door.
S&P and Fitch reduced SA’s credit rating one notch to BB+ from BBB- last Monday and Friday, respectively, placing the country’s bonds in “speculative grade” commonly known as junk.