Moody’s, an international credit rating agency, recently downgraded five banks as well as 12 municipalities and Eskom and Telkom. In short, they are saying that lending money to the municipalities, which include Johannesburg, or the banks, comes at slightly more risk than previously they considered. An economist commented that the accounts and books of the various municipalities are in a total mess and a sign of a State that is not in a healthy situation.

Ultimately, it will make it more difficult for those municipalities as well as Telkom and Eskom to borrow money, which means that they will be lent money at high interest rates which ultimately means that we, the taxpayers, will be forced to pay more. The Rand weakened on the news immediately and Moody’s gave as one of the reasons, “the weakening of the South African government’s credit profile”.