On Monday afternoon, S&P went ahead with their downgrade of the South-African credit rating. As a country we are now at 'Junk Status", meaning that our country has finally become a liability for investors. This will have a profound knock-on effect that will shock our economy for years to come. But hang on. Why did this happen?
To explain that would be extremely complicated as I would have to explain so much of the laws that affect us, from 'quotas' to 'land redistribution'. To put simply? State capture.
Using his influence as President, Jacob Zuma has been aggressively pushing many of his cronies and allies into major political positions in order to grab hold of the country's power structures. The last holdout was State Treasury with Pravin Gordhan at the helm. On Friday Jacob Zuma went ahead with his decision to axe the minister and his deputy completing the full takeover of the state. The effect was felt immediately as our currency crashed and the subsequent credit downgrade.
The ripple effect will soon be felt as export prices on essentials like fuel and food rise. Small businesses will close down as inflation takes hold and this uptick in unemployment will cause a rise in crime. So where will it end? Our only hope now is to rise up in numbers and let our voices be heard.
It has started..
