South African business leaders are preparing for more credit-rating reductions as mismanagement hobbles state companies and after bad decisions by President Jacob Zuma, according to the head of one of the country\u2019s biggest corporate lobby groups.<\/p>\n
\u201cWe are expecting further ratings-agency downgrades because all the things that they said we shouldn\u2019t do, the president has gone on to do,\u201d Bonang Mohale, chief executive officer of Business Leadership South Africa and a former chairman of Royal Dutch Shell’s South African unit, said in an interview at Bloomberg\u2019s office in Johannesburg.<\/p>\n
Fitch Ratings and S&P Global Ratings cut South Africa\u2019s foreign-currency debt to junk in April\u00a0citing concerns about policy direction, political infighting and poor governance at state companies after Zuma fired investor-favorite Pravin Gordhan as finance minister.<\/p>\n
Another downgrade to non-investment grade in the assessments for local-currency debt would exclude the nation from global indexes and lead to billions of dollars in capital outflows.<\/p>\n
Moody\u2019s Investors Service is the only major company to assess both South Africa\u2019s foreign-currency and rand-denominated debt at investment grade.<\/p>\n
BLSA, a group of about 80 of the country\u2019s largest companies, will be more vocal on social issues and in combating corruption, and seeking ways to transform and grow the economy, particularly after the African National Congress elects a new leader in December, said Mohale.<\/p>\n
More Vocal<\/strong><\/p>\n \u201cWe accept as business that we have been quieter,\u201d Mohale said. \u201cWe are going to talk to government, talk to the minister of finance and talk to the president to his face and saying something publicly,\u201d he said. \u201cThe politeness has died.\u201d<\/p>\n Zuma\u2019s eight years as national president has been characterized by scandals, policy missteps and controversial appointments that have led to deep divisions within the ruling party.<\/p>\n He is due to step down as leader of the ANC in December, with Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the former head of the African Union Commission and Zuma\u2019s ex-wife, the main contenders for the party post. His term as president of the country ends in 2019.<\/p>\n His successor will inherit an economy that slid into recession in the first quarter and a network of officials implicated in allegedly looting taxpayer funds, as well as a party that has been bleeding support.<\/p>\n It lost control of economic hub, Johannesburg, and the capital, Pretoria, in local government elections last year, leading to opposition parties cooperating to run four of the country\u2019s largest cities. The ANC\u2019s overall support slid to 54.5% in the municipal poll from 62% in a national ballot two years earlier, the worst electoral performance since the first all-race vote in 1994.<\/p>\n \u201cAny right-thinking South African knows beyond any shadow of doubt that the actions of this ANC-led government\u201d have lost the party the 2019 elections, Mohale said. \u201cCoalition politics is a reality today, now it is going to move to national.\u201d<\/p>\n
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