South Africa’s Banking Association (BASA) on Friday said that Fitch’s decision to downgrade the country’s credit rating to “junk” status would likely make it more difficult for banks to attract foreign investment into the country, adding that President Jacob Zuma’s cabinet reshuffle was to blame.
“The fact that Fitch has directly attributed its downgrade to the actions of the president demonstrates in no uncertain terms the broad assertion that the cabinet reshuffle … was not in the national interest,” the body said.
Fitch downgraded South Africa’s foreign and local currency debt to speculative grade, while S&P Global Ratings on Monday cut the hard currency borrowing to “junk”. Both cited likely changes in economic policy after a cabinet reshuffle.
President Zuma’s decision to sack the respected former Finance Minister Pravin Gordhan has received wide criticism, even from his allies.
Following the cabinet reshuffle, calls for him to resign have increased, with some parts of the country witnessing mass protests demanding the president’s resignation.