Mboweni warns third wave of Covid-19 could hurt country's ratings
South Africa's finance minister said on Thursday that a third wave of the coronavirus could destabilise the government's efforts to control its finances and avoid a further downgrade of the country's sovereign rating.
Two of the top three rating agencies - Moody's and Fitch - downgraded South Africa's sovereign rating further into junk in November on concerns of rising debt levels and the government's ability to raise revenues and pay off debt amid the economic shock inflicted by the pandemic.
Tito Mboweni, replying to questions in a virtual parliament session, said the rating agencies would be looking closely at how the government was moving on its promised structural reforms such as infrastructure growth, telecom spectrum allocation, reliable power supply and reducing the public sector wage bill.
"If it (reform) was seen to be deviating from our fiscal framework, then we're going to be in trouble," Mboweni said, and warned that a third wave of coronavirus could hurt the efforts.
"I'm scared that the third wave is coming... It's going to be more vicious than the second one," he said.
He said any third wave would have to be handled so that the country could still keep the economy going, or else it could hurt its fiscal framework.
Africa's most industrialised country saw a first wave of coronavirus when it was already in recession. It had to impose two hard lockdowns to curb the spread of infections, setting the economy back by 13 years and pushing millions more into unemployment at a time when almost a third of the population was already jobless.
The finance minister said the country's floating exchange rate, low and stable inflation and a well-regulated financial market were positive factors that could lend support in the event of another crisis.
"I think we are on a good wicket, and I am on the crease."
Comments
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...
VISIT SHOWROOM
Rentech provides renewable energy products and services to the local and selected African markets. Supplying inverters, lithium and lead-acid...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
