Downgrade 'a warning to ANC'

According to the Democratic Alliance, South Africa's downgrade by the Fitch rating agency from stable to negative is a stern warning to the ANC and its partners in the tripartite alliance not to toy with South Africa's prudent macroeconomic policies in pursuit of short-term, self-interested agendas.

"As Fitch has noted, if these harmful policy shifts are realised, we will almost certainly face a downgrade in our investment rating," Marais said. "This will raise the government's borrowing costs, affect its social welfare rollout and compromise its massive infrastructure investment programme.

"Transnet (R37bn) and Eskom (R150bn) will both be reliant on domestic and international capital markets for their funding. Without affordable lending, we won't be able to invest in roads, railways and ports, broaden our power generation capacity and harness the potential employment benefits of a growing economy."

Kobus Marais, who speaks for the party on finance, urged the ANC to show astute economic leadership. "The post-Polokwane ANC must realise that it cannot disregard the realities of the global market place if South Africa is to weather this storm," he said.

Global credit ratings agency Fitch Ratings has changed the outlooks on Absa Bank, Investec Bank and Nedbank and their respective holding companies to negative from stable, following Monday's revision to the outlook on South Africa's sovereign long-term foreign currency issuer default rating (IDR) of 'BBB+'.

Fitch said in a statement released late on Monday that the outlook change reflects a deteriorating macro-economic environment and its anticipated impact on the financial performance and financial position of the banks.

Fitch downgrades SA banks
Fitch: SA risks hard landing
Treasury gives Fitch thumbs down