Editorial | South Africa’s status as an investment destination has taken a battering over the past month. With next year’s elections looming, we can only hope that concrete action will follow, not the vacuous electoral posturing we have become so used to
Secondly, S&P Global Ratings released its sovereign credit rating two months ahead of schedule, downgrading the country’s outlook from positive to stable, citing severe power shortages and infrastructure constraints as the primary reasons for the downgrade. This is another red flag for foreign investment.To add to the country’s woes, fourth quarter GDP growth data showed the disastrous effects of the rolling blackouts – a 1.3% contraction over the period measured.
S&P also downgraded the growth forecast from 1.5% to 1%, well below the 5% level needed to lift the country out of this negative spiral and generate the jobs it needs. Unemployment is at a staggering 32.7% – with youth unemployment at 63.3%. In response to the S&P rating, National Treasury said it acknowledged the decision and reiterated its commitment to reduce rolling power cuts. It made the same commitment to fast-tracking legislation to close financial loopholes that make money laundering and corruption so easy.
The president reshuffled this week his Cabinet and appointed an electricity minister whose direct role will be to “fix Eskom”. A tall order indeed. Our energy minister, meanwhile, sticks doggedly to fossil fuel as the pillar of the energy mix.Policy implementation and infrastructure delivery are slow to nonexistent. With next year’s elections looming, we can only hope that concrete action will follow, not the vacuous electoral posturing we have become so used to.
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