On 1 November, Moody’s changed its outlook on South Africa from stable to negative. In a blunt statement, it gave the government notice that unless it comes up with “a credible fiscal strategy to contain the rise in debt” in the budget in February, Moody’s will most likely downgrade South Africa to junk status. That will trigger overseas financial institutions selling an estimated US$15 billion of South African bonds.
That would of course hurt us all and leave our nation, as Shakespeare put it, “bound in shallows and in miseries”. Let’s hope we dodge that one – on average it takes a country five to six years of hard slog to get out of junk status.