multiple downgrades are likely to follow and the economy will face years of decline — if not a full-blown economic crisis and, ultimately, a debt default.
President Jacob Zuma’s craven attack on national treasury last week, by firing SA’s highly respected finance minister Pravin Gordhan, has set off a chain reaction he probably scarcely imagined possible. A week later: SA has a junk rating from Standard & Poor’s (S&P); there are ominous signs from Moody’s and Fitch; the market has tumbled; Zuma faces a backlash from civil society; and the ANC’s partners, Cosatu and the SA Communist Party (SACP), have asked him to quit.
Outrage is building within the ANC too.
By going for broke, an increasingly paranoid and isolated Zuma has emboldened and united his critics into defiance, forcing the fence-sitters and apologists in the ANC to finally take a stand.
In effect, Zuma’s reshuffle erased 17 years of fiscal and economic progress since S&P upgraded SA’s foreign currency rating to investment grade in 2000 — the first time since democracy in 1994. Now the country is back where it started.
The ANC now has a choice, as SACP second deputy general secretary Solly Mapaila put it, between "Zuma and the people". If it chooses Zuma, it risks another electoral slide in 2019.
This is a peek into Financial Mail's cover story.
If you are already a subscriber, please click on the following link to go to the full article: Junk president. The cost of a downgrade.
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