The evidence is tipping towards a downgrade for SA by rating agencies — but the probability is finely balanced in SA’s favour, Barclays Africa CEO Maria Ramos has said.
"There is a bit of a struggle between the evidence and the emotion at the moment — and the evidence doesn’t always support the emotion, the evidence is probably more poised towards a downgrade," she told the South African Portuguese Chamber of Commerce in Johannesburg on Thursday.
Ramos was responding to questions from the audience on whether the country will be downgraded when rating agencies review its investment-grade rating from the end of this month and into December.
She said it was finely balanced in favour of SA not being downgraded but being kept on watch to face another review in six months’ time.
Ramos, who is also part of the CEO initiative working with government and labour to avert a downgrade, said a great deal of work and effort had gone into showing the rating agencies that while there were challenges, the economy was not in recession.
"There’s significant collaboration between government, the private sector, labour … and that there is huge effort into ensuring we stay on plan."
Ramos told the chamber that what kept her awake at night was the sluggish economic growth in SA that prevented the country from meeting its challenges.
In July, the Reserve Bank projected the economy would stagnate this year, but recently shifted that to growth of 0.4%, which is in line with Barclay’s projections. Growth could accelerate to 1.7% next year.
Ramos said Finance Minister Pravin Gordhan had been leading from the front to stimulate the economy but constraints to growth remained an issue, such as the lack of implementation of policy.
She cited the failure to sign into law the Financial Intelligence Centre Amendment Bill as an example.
The Council for the Advancement of the South African Constitution is challenging President Jacob Zuma’s failure to sign the bill in court.
Ramos said Barclays Africa was in its own way implementing the National Development Plan. She urged business to look at the plan and give it effect in their own organisations.
With Natasha Marrian
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