Review decision by Moody’s ‘unjustified’

SA’s two biggest federations say the government, its labour partners and business have made a considerable effort to foster growth.

Cape Town - South Africa’s two biggest federations say Moody’s decision to place the country under a downgrade review is unjustified.

Cosatu and Fedusa said government and its social partners in labour and business had made a considerable effort to secure investments and foster sustainable growth. The federations warned of the devastating impact a downgrade would have on the ailing economy and workers who were already burdened with an increased cost of living.

Read: Gordhan charms, but investors wary

Moody’s announced the downgrade review on Tuesday, citing a continued rise in risks to the country’s medium-term economic prospects, among other reasons.

“The review will allow Moody’s to assess to what extent government policy can stabilise the economy and restore fiscal strength in the face of heightened domestic and international market volatility,” said the agency.

Cosatu spokesperson Sizwe Pamla said it called on government to work tirelessly to ensure the downgrade did not materialise. Fedusa implored the agency to recognise the work government and its social partners had embarked on, calling for necessary caution and collective wisdom.

It said a downgrade would be a slap in the face of government’s deliberations with investors in the UK and the US.

Fedusa Parliamentary Officer Riefdah Ajam said they had faith that the meetings convened by Finance Minister Pravin Gordhan with international investors would restore investor confidence in the country’s economy.

However trade union Solidarity said Gordhan’s Budget speech was not sufficient to protect the country against a downgrade. Moody’s makes its final decision after a visit to South Africa between March 16 and 18.

CAPE TIMES