In a statement issued today the CEO of SACCI, Mr. Neren Rau, said:
The South African Chamber of Commerce and Industry (SACCI) views the downward revision to South Africa's credit rating outlook by Fitch as a strong message from the international investor community to government, business and labour to urgently address the challenges facing our economy.
Considering the risks identified by Fitch, South Africa has six months to ensure that the outlook and ratings improve by ensuring:
Production in the platinum sector picks up significantly by finalising the latest wage agreement.
The government debt trajectory remains downward by cutting any unnecessary consumption expenditure.
Investor confidence is strengthened by amending policies that will otherwise weaken property rights (e.g. Intellectual Property Policy, Private Security Bill, Investment Bill).
South Africa simply cannot grow without foreign investment because of our domestic savings gap, and this means the credit rating on our government bonds must remain investment-grade. Further downgrades will make it very expensive for government to manage the budget deficit, increase the cost of capital for the entire economy and reduce the potential pool of foreign investors willing to invest in South Africa.
SACCI calls upon government to prioritise the risks identified by the rating agencies for economic policy over the short to medium term to ensure that South Africa can continue to attract foreign investment.
Neren Rau CEO 011 446 3800
Pietman Roos Senior Policy Consultant 072 360 5575