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It was refreshing, but not surprising, to see that Finance Minister Tito Mboweni immediately saw an opportunity in Moody’s Investor Services downgrading of South Africa’s sovereign credit rating, rather than an obstacle.
Fin24 reported that he said "Hallelujah" upon hearing the news. Progressive people would have recognised consistency in a Finance Minister who has never made it a secret, no matter who calls him out, that to move forward and realise lasting, positive, outcomes, something deep has to change in the way we do things in South Africa.
It cannot be denied that for now, the sovereign credit rating downgrade by Moody's, joining those of the two other major credit rating agencies – Standard & Poor’s (S&P) and Fitch – will have unfortunate consequences. It will:
- Lead to SA being excluded from the FTSE World Government Bond Index (WGBI);
- Cause interest rates and the general cost of borrowing to rise;
- Cause fund managers with investment grade mandates to move the funds in their care to safer markets elsewhere;
- Bring down a dark cloud over South Africa and scare off potential investors, especially those who had begun to warm-up to slowly rejuvenating Ramaphoria.
South Africa has had its work cut out for it for several years now.
It doesn’t help, of course, that the downgrade was announced while the country, together with others around the world, is in the middle of a war against a fast-advancing invisible enemy in the form of Covid-19, which requires massive resources we do not have, to fight it effectively. To fight and win the war against Covid-19, South Africa and the rest of the world are "in it together".
But to fight and win the war to regain the massive reputational capital lost through state capture and other forms of corruption, we, South Africans, are "in it together". What the latter means is that those who govern our country can no longer rely on political platitudes and kicking the can further down the road each time they get to it, hoping that the rest of us will forget what needs to happen and simply go with the misleading poetry.
The structural reforms that Mboweni told us had already begun, must be seen to be rolled-out; not just read about in the media as if they are done for a small interest group of South Africans. Long-suffering South Africans must be told what, exactly, is being done – other than replacing old teams of political deployees with new ones – and what is expected to come of it. It will take a lot more than mere emotional calls to national solidarity through expensive video campaigns to get all South Africans to place their hands on deck and fully play their part.
It is a real pity that, through the current crises, our collective attention has been taken away from the work done by the Zondo Commission of Inquiry into state capture and other commissions that have been set up to look into what went down in various state-owned entities over the past decade.
We must also not forget that the credibility of these commissions and their work sits right at the heart of structural reforms. Simply replacing one set of crooks with a new set of deployees who - given the same opportunities, temptations, and political pressures - might easily go rogue on us, is not enough. The shameless, official silence on continued redeployment of some of the state capture kingpins and enablers into important parliamentary committees and other arms of the state are also unhelpful in the drive to regain lost trust.
The world is laughing at us, thinking, correctly, that we’re fools to believe we can take it for fools. If you don’t believe this, go back to the frank televised interview of CNN’s Richard Quest by our own Bruce Whitfield during the 2020 World Economic Forum (WEF) in Davos, Switzerland.
- READ | 'If you think it was bad, it was worse': CNN's Richard Quest slams Team SA over state capture
The hard truth is that this interview will remain on cyberspace for those who forget to be pointed to it. It will still be there when we send another Team SA to the next WEF, in February 2021. Will we have a better story to tell the world of investors, chins held-up, or another basket of excuses, aided by the "convenience" of Covid-19’s unfortunate contribution to our woes?
Granted, few will disagree that Moody’s downgrading of South Africa’s sovereign credit rating couldn’t have come at the worst time for the country – despite the fact that it was long coming - and its impact on our livelihood will soon begin to be felt, compounded by the ongoing lockdown to aid the battle against Covid-19.
But Mboweni is still correct to see opportunity where others only see the wrath of the gods and misery. We should hope that his comrades and friends in the governing tripartite alliance and colleagues in government will also have their eyes opened to the reality that we’re going to have to break some eggs if we want to start making that omelette needed for our country’s long-tern economic recovery.
If we fail to see the opportunities in the double kicks-in-the-butt we have just received, like the Shakespearean tide that appears often in the affairs of men, we risk ending with a collective voyage that is bound to end in more shallows and lasting miseries.
We must take the current as it currently serves, acknowledge the pain but also work hard at seeing the light at the end of it all; a light that will sustainably illuminate our path only if we ensure that the planned structural reforms will lead to real and lasting changes in the way our affairs are run - unhindered by fear of change and archaic political ideologies - not superficial ones.
* Solly Moeng is brand reputation management adviser and CEO of strategic corporate communications consultancy DonValley Reputation Managers. Views expressed are his own.
