Ramaphosa’s union struggles could determine rebound

Significance

This followed two days after Finance Minister Tito Mboweni’s Medium Term Budget Policy Statement (MTBPS), which offered an honest assessment of the steep deterioration in the state’s fiscal metrics but did not set out a concrete plan to arrest this. Pretoria risks a potential downgrade to ‘junk’ status after February’s main budget -- unless Mboweni can effect the deep, 150-billion-rand (10-billion-dollars) worth of proposed spending cuts and tax measures needed to stabilise the public debt ratio over the next three years.

Impacts

• Moody’s outlook decision will hinder the government’s efforts to boost confidence in the economy at its Investment Conference this week.
• Eskom’s woes, and government inaction on its debt, will weigh on investment and wider confidence in the government’s reform efforts.
• Pretoria's unexpected announcement of a prospective spectrum auction will go some way to signal that long-promised reforms are on track.