Moody's negative debt outlook:  Policy certainty essential to creation of opportunity

Moody's Investors Service today shifted South Africa's debt rating outlook to negative, and identified political instability and policy uncertainty as the main factors in the increase in our risk profile (see Bloomberg report).

This will unfortunately further erode confidence in our economy, and could force government to pay higher interest rates on its debts in future. This means that fewer resources will be available for improving the lives of our people.

The Zuma administration's failure to provide clarity on the nationalisation of mines, the failure to provide a credible and coherent macro-economic growth strategy, the hostility shown towards prospective investors such as Walmart, the inability to curtail government waste and the tendency in government to place tripartite alliance politics above the national interest do not inspire confidence.

Government should be doing all that it can to demonstrate to investors that South Africa is open for business, not increasing our country's risk profile and placing a growing economic burden on the South African people.

If we are to improve South Africa's debt rating outlook, we must work to create a stable and predictable policy environment that encourages long-term investment and growth. Over the coming months, the Democratic Alliance (DA) will be engaging in a policy project designed to identify what South Africa needs to do in order to achieve 8% economic growth.  It is only by stimulating accelerated economic growth and creating an enabling environment for job creation that we will be able to create opportunities for all South Africans.  

Statement issued by Dr. Dion George MP, DA Shadow Minister of Finance, November 9 2011

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