By Ike A. Offor
The credit rating of South Africa has been downgraded to one notch above junk status by rating agents, Standard and Poors and Fitch.
South African currency, the rand has come under severe pressure since the country’s president reshuffled his cabinet las week, sacking his much favoured minister of finance, Mr Pravin Gordhan.
Mr Pravin Gordhan has been seen as a man who has been doing more to challenge president Jacob Zuma’s corrupt government excesses and the move to remove him has been seen as fight against anticorruption and Zuma’s permission to go into the state’s treasury to take as much money as needed for his corrupt ways.
Though, Mr Zuma has emphasised why he reshuffled his cabinet, which was to help his government carry out the much-needed strong economic transformation, which he said that some in his cabinet was against such big economic transformation.
This downgrading is really a terrible news for South Africa and has caused the government institutions to sell off bonds, and the yield on government bond gone up, making it extremely hard for the government to raise bond.
How this would play out in the next coming weeks remains to be seen but it wouldn’t be a rosy outlook for the government and the economy.
There has been calls for vote of no-confidence against President Jacob Zuma, which the opposition is spearheading but how that will be received by the majority of the ruling ANC members remains to be seen.