Posts tagged with 'junk status'

 

SA in crisis while ANC eats cake, celebrating its 108 years

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The ruling Anc party,was holding a rally in Kimberley celebrating its 108 years.This celebration, which is usually accompanied by a jovial mood of song and dance by party leaders, members and supporters, happens during a time when the country has been plunged into several crises of epidemic proportions. Can the ANC really afford to celebrate? Can it afford to pop Champagne during such difficult times faced by the country?

Poverty levels are accelerating, inequality is deepening, unemployment levels have reached the highest percentage of 29.1% in the last quarter of 2019, the highest recorded by Statistics SA since 2008, with 9.6 million South Africans currently unemployed, 8.6 million of these being black.

The economy is battling to recover from a technical recession, with the country constantly facing a threat of being given junk status by rating agencies.

One of the major crises facing the country is the power utility Eskom, which has struggle
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ANC regime has driven SA to junk status – GDP drops by 0.6% in 3rd quarter – SA is going to struggle to get rid of its economic crisis

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The financial decline that continues in South Africa has given the business sector reason to become more concerned about future business activities in most business areas.

Gross Domestic Product (GDP) declined by 0.6% in the third quarter of 2019, according to the Statistics Service’s report.

Calculated on a year-to-year basis, this is seen as a downturn that the economy has now stagnated, thereby having serious consequences for job creation.

The government hoped for a 1.5% growth rate, but economists warned that the target could not be achieved if sufficient new jobs were not created.

South Africa is now in a junk status phase, and although Moody’s is the only rating agency still trying to hide it, it’s clear that in the next decade the country will struggle to get rid of its economic crisis.

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Junk Status looms – Implementation of NHI will have disastrous consequences for SA economy

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AfriForum today sent a letter to President Cyril Ramaphosa, Finance Minister Tito Mboweni and Minister of Health Zweli Mkhize warning the civil rights organization that the implementation of national health insurance (NHI) could eventually lead to the downgrading of the country’s credit rating to junk status .

This comes after the credit rating agency Moody’s recently downgraded South Africa’s credit rating from a stable to a negative outlook. The reason for this downgrade according to Mood is the bleak growth prospects and growing public debt. In its letter, AfriForum argues that unaffordable, ideological policies such as the NHI will lead to South Africa being downgraded to junk status, as the country simply cannot fund it.

“To continue with the implementation of the NHI will not only be disastrous for the South African economy; it will also inflate government debt to levels that will make it impossible to escape the downgrade to
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SA has a national debt of R3 trillion rand and tax deficit of R53 million

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Following the disappointing mid-term budget speech by Tito Mboweni, the Rand reached its lowest level in weeks. Eskom’s rescue plan has nowhere really figured in either Pravin Gordan’s submission or Mboweni’s budget reason.

The government’s financial situation is rapidly deteriorating with the national debt of R3 trillion and a tax deficit of R53 billion.

Moody’s is therefore expected to downgrade the country to negative from where it currently stands at stable.

However, there are fears that Moody’s will downgrade the country directly to junk status which will affect Government bonds as the Citigroup’s World Government Bond Index contains only investment-grade securities.

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ANC regime threatens financial survival of SA, Government debt increases every day

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The ANC government is extremely dangerous and threatens the financial survival of South Africa, as its eagerness to lend remains unsaturated.

This is the opinion of an economic adviser following the SA Reserve Bank’s announcement that government debt is rising faster than provided by any institution.

The government’s total loan debt has risen to a breathtaking level of just over 58% of the annual budget.

Experts point out that South Africa has now reached the point where Moody’s can no longer turn its head, and even if that were to happen, it is an undeniable reality that the country has landed deep into the abyss of being subjected to junk status, and may not be coming out of it again soon.

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Taxpayers will now have to bailout the Ramaphosa regime after Moody lost patience with SA’s poor economic situation and proposes a tax increase

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The poor economic conditions, unemployment, little foreign interest, the land grab program, Eskom and other entities’ financial inability are all reasons why the country is in such a mess.

Moody’s has pointed out to the ANC-regime that it will have to raise taxes to fix the mess at Eskom, which is the first step to a series of tax hikes.

With the SABC, Denel, SAL, Eskom, and several other entities failing to be a profitable industry as it was years ago, the regime is pushing to raise taxes.

The poor decision to launch a National Health Plan while the country is in junk status is considered to be one of the stupidest decisions the Ramaphosa regime has yet made, which will also lead to astronomical increases in taxes.

Moving out of professional corps such as doctors, nursing staff, lawyers and others is the strongest indication that the country is heading for an enormous crisis that cannot be reversed.

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The Rand remains on a rollercoaster of volatility -the currency continued to weaken due to the heightened global growth risks after talk of financial bailout for Eskom

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Last week’s poor global data is indicative of a worldwide economic rough patch. Talk of another massive financial bailout for Eskom has put South Africa on thin ice with Moody’s. The country is said to be fighting a losing battle to keep its last remaining investment grade credit rating.

Foreigners have already begun dumping R2 billion worth of government bonds. This comes before what looks like an imminent downgrade to junk status, which is placing a huge amount of pressure on the local currency.

Last week’s poor global data is indicative of a worldwide economic rough patch.

Talk of another massive financial bailout for Eskom has put South Africa on thin ice with Moody’s. The country is said to be fighting a losing battle to keep its last remaining investment grade credit rating.

Foreigners have already begun dumping R2 billion worth of government bonds. This comes before what looks like an imminent downgrade to junk status, whic
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Foreigners are dumping SA bonds at a rate of almost R2 billion ($132 million) a day as junk status looms

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Investors have been dumping South African government bonds at a rate of almost R2 billion ($132 million) a day in August.

With issuance increasing and a downgrade to junk a looming possibility, non-residents have sold a net R14.4 billion of the debt in August so far, according to JSE data compiled by Bloomberg.

That’s an average of R1.8 billion a day. The sales have wiped out inflows at a time when the country needs foreign investment to close a current-account deficit that was equivalent to 2.9% of gross domestic product in the first quarter.

The government increased the amount of local-currency debt sold at weekly auctions by 37% last week to help pay for a 128 billion-rand bailout for Eskom Holdings SOC Ltd., the state-owned electricity company.

That will push up borrowing and widen the budget deficit, placing the country’s last-remaining investment-grade rating at risk. Moody’s Investors Service, which rates South Africa’s deb
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National Health Plan is going to need at least R180bn to R250bn for 12-month spending – with SA’s faltering economy that’s a disproportionate amount

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Implementing a National Health Plan does not mean, like Eskom, demanding a R50 billion from the government’s money it has collected from taxpayers.

The reality is, too, that it cannot come into effect by making a slight upward adjustment in the personal taxes levied.

The reality is that at least R180bn to R250bn will be required to be ready for a 12-month period.

Of course, South Africa with its poor economy cannot run after it because France and Japan have such medical plans, which is not an unemployment figure of 30%, and there is no ignorance about how such a system manages and not operated.

South Africa is in a financial mess – junk status, and with it an inability to reduce unemployment and thus also violence and corruption.

Maybe the initiators come to mind – because 2026 is around the corner and the economic situation is not going to be corrected in the short time until the new plan is implemented.

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