South Africa will most likely have reached junk status by the end of this year, according to Chris Hart, former Standard Bank economic commentator.<\/p>\n
Hart, who resigned in March from his position as investment strategist at the bank\u2019s wealth and investment division amid a Twitter furore, spoke at a Cape Town Press Club lunch on Thursday about the current economic and political climate as well as what he perceives as censorship on freedom of speech in South Africa.<\/p>\n
The fact that Moody\u2019s rating agency has retained its credit rating outlook of South Africa at two notches above junk status is not a sign that other rating agencies, such as Fitch and Standard & Poor\u2019s, would refrain from downgrading the country to junk status, Hart said.<\/p>\n
\u201cWith Moody\u2019s it was more a case of \u2018the glass is half full, not half empty’. Moody\u2019s had a wait-and-see stance, but Fitch and S&P may take a different view (when the rating agencies consider South Africa\u2019s credit rating in June).\u201d<\/p>\n
Hart spoke about South Africa\u2019s watershed moments \u2013 the first of which was a peaceful transition to democracy under the late president Nelson Mandela.<\/p>\n
For him, the second watershed event when was President Jacob Zuma was elected as ANC leader in Polokwane in 2007 and the corruption charges against him were dropped. \u201cThis compromised the institutions that used to give South Africa its strength.\u201d<\/p>\n
According to Hart, there is currently a landscape of policy failure and politics of distraction under the ANC-led government. \u201cRace is that distraction. But it\u2019s not so much about race for the ANC than control. \u2018Transformation\u2019 has become a watchword for control.”<\/p>\n
Hart said South Africa has a budget shortfall because there\u2019s no economic growth. \u201cAnd how do you bring new economic activity in existence? You have to have investment. And what resources do you use to invest? The answer is you have to consume less than what you produce. But we don\u2019t teach people that.\u201d<\/p>\n
Hart is also of the view that South Africa\u2019s decline to junk status is only a \u201cmilestone\u201d and the next step would be to ask the International Monetary Fund (IMF) for a bailout.<\/p>\n
\u201cBut the IMF is the nastiest, most spiteful organisation on earth. They\u2019ll lend you money on the condition that you stop doing the things that landed you in trouble. And these are the things government is doing to get more votes and now they can\u2019t do it any more.\u201d<\/p>\n
Hart added that in two-and-a-half years\u2019 time the rand could trade at R60 against the US dollar<\/strong>.<\/p>\n \u201cIt will be significantly weaker from the current level. We\u2019re not immune against that. The current economic thinking is taking us down this route.\u201d<\/p>\n From a socioeconomic point of view, Hart said South Africans\u2019 freedom of speech is infringed upon. \u201cAnd the media is complicit. Maybe we need a media tribunal and we\u2019ll start appreciating what media freedom is.\u201d<\/p>\n With reference to the tweet that landed him in trouble in January this year, Hart bemoaned the fact that South Africans aren\u2019t defending their fellow citizens\u2019 right to say whatever they want to say.<\/p>\n \u201cNobody has the monopoly on rights. There is no fighting against the current insidious censorship. Freedom of speech has to be more important than being offended,” he said.<\/p>\n Hart was suspended early this year after a tweet that said: “More than 25 years after apartheid ended, the victims are increasing along with a sense of entitlement and hatred towards minorities.\u201d<\/p>\n Standard Bank immediately distanced itself from his tweet, adding that the bank did not endorse the comments made.<\/p>\n Fin24<\/a><\/p>\n Chris Hart defends his qualifications<\/a><\/strong><\/p>\n Chris Hart reveals why he quit Standard Bank<\/a><\/strong><\/p>\n Chris Hart quits Standard Bank after \u2018racist\u2019 row: report<\/a><\/strong><\/p>\nCensorship and freedom of speech<\/h3>\n
More on Chris Hart<\/h3>\n