Gordhan takes swipe at rating agencies
Johannesburg - Finance Minister Pravin Gordhan took a swipe at international rating agencies on Thursday, saying they were not giving South Africa enough credit for its economic management.
"We really seriously disagree with their assessment... they are not giving us enough credit for managing our economy in a counter-cyclical way," Gordhan said at the launch of the Black Business Council in Midrand.
Moody's Investor Service downgraded the SA National Roads Agency Limited (Sanral) over concern about the-lower-than-anticipated toll income.
The day before, Moody's downgraded the debt and deposit ratings of five South African banks: Standard Bank, Absa, FirstRand, Nedbank and Investec.
Moody's and Fitch previously revised South Africa's credit rating downwards.
Gordhan said the rating agencies were shown up for their inadequacies when they did not foresee the European financial crisis of 2008.
"They are now using the European problems as the brush to paint everyone else... they now wish to paint us with the same brush," he said.
This was despite South Africa's good management of its fiscus and debt.
Gordhan said South Africa was doing better than equivalent countries.
He criticised Moody's for downgrading Sanral after he allocated R5.75bn to it in his budget speech last week to ease debt of R20bn incurred in upgrading Gauteng roads.
"We take that initiative... they clearly haven't read our budget documentation," Gordhan said.
gordhan is perfectly correct--for those who follow internation financial matters --all the rating agencies are well past their sell by date--they add no value -are not there when they should be --state the bleeding obvious--and are ignored by all the world stock exchanges --they are on their way to becoming obsolet eand extinct --watch them fall
Pravin Gordan is like a grade 10 school boy mouning about his maths marks,from A plus to B minus. Take it on the chin boet.
Any corporation or country that is downgraded by S & P, Fitch, Moodys or whoever will bleat. Who rates the Agencies? They are as imperfect as the rest of us. I agree with Anthony - rating agencies are ignored by the bourses that matter.
The agencies are fallible, but their research is impeccable. The problem with SA is not the economy, its the management of the country that is the problem. It is bound to backfire on SA at some stage in future, when corruption and overspending (and/or underspending) in certain sectors take hold - and the negative results of our mismanaged education system take hold. The agencies will not wait till it happens before they indicate a negative trend. I think the agencies are correct. Gordhan should address the cabinet and parliament on this, not the agencies.