Pretoria: Tens of thousands of people marched through South African cities in largely peaceful protests to demand President Jacob Zuma's resignation. In the biggest political protests in years, large crowds gathered in the capital Pretoria, the economic hub Johannesburg, and the coastal cities of Durban and Cape Town.
Nobel laureate and anti-apartheid leader Desmond Tutu, 85 and frail in health, made a rare public appearance to support the protests outside Cape Town. Several thousand people attended the Johannesburg protest organised by the opposition Democratic Alliance party, which hopes to make gains in the 2019 elections. "We want Zuma to fall. He is too corrupt. Real people are struggling," protester Vanessa Michael, 54, said.
Meanwhile, Fitch Ratings, last week, said, “South Africa's Long Term Foreign- and Local-Currency Issuer Default Ratings to 'BB+' 'from 'BBB-'. The Outlooks are Stable.” It said the decision reflects Fitch's view that recent political events, including a major cabinet reshuffle, will weaken standards of governance and public finances.
The statement said, “The Cabinet reshuffle, which involved the replacement of the finance minister, Pravin Gordhan, and the deputy finance minister, Mcebisi Jonas, is likely to result in a change in the direction of economic policy. The reshuffle partly reflected efforts by the out-going finance minister to improve the governance of state-owned enterprises. The reshuffle is likely to undermine, if not reverse, progress in SOE governance, raising the risk that SOE debt could migrate on to the government's balance sheet.”
“The new finance minister has stated that he does not intend to change fiscal policy and remains committed to expenditure ceilings that have been a pillar of fiscal consolidation. However, Fitch believes that following the government reshuffle, fiscal consolidation will be less of a priority given the president's focus on 'radical socio-economic transformation'. This means that renewed shortfalls in revenues, for example as a result of lower than expected GDP growth, are less likely to be compensated by expenditure and revenue measures. This could put upward pressure on general government debt, which at an estimated 53% of GDP at end-March 2017 was already slightly above the 'BB' category median of 51%,” the statement said.
The downgrade came a week after the cabinet was reshuffled which saw Gordhan being replaced by Malusi Gigaba, former Minister of home affairs. One of the reasons being forwarded for the downgrade included “tensions within the ANC will mean that political energy will be absorbed by efforts to maintain party unity and fend off leadership challenges and to placate rising social pressures for addressing inequality, poverty, and weak public service delivery. The Treasury's ability to withstand departmental demands for increased spending may also weaken.” The Treasury is yet to react to the latest ratings decision.
