Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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The investor services of Moody’s, a rating agency, have now downgraded South African government debt a further notch to Baa2. They say this is because there are poor growth prospects in South Africa and rising public debt. That now gives us the same rating as Brazil and Russia and we are now just two notches above the rating for junk rating which is a very bad rating.
The effect of this, for example, is that Eskom said that each downgrade costs their financing for all these new power stations that they have to build, an extra 30% to 40% in terms of the interest that they have to pay. We say the interest they have to pay – we all know at the end of the day that is the interest that we have to pay. The National Treasury is obviously going to react to this and in a release they issued said, “Government will continue to make the tough decisions that are necessary to address our challenges …”. One can only assume that they are not going to reduce what they pay government employees, they are not going to reduce the benefits to the poor and we are going to be seeing tax increases, not only in 2015, but for many years ahead.
Posted by Michael de Broglio on Tuesday 11-Nov-14
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Comments
Nicky said:
on Monday 17-Nov-14 08:55 AM
I find it ironic that Eskom now has to have an increase in their financing when their power-cuts recently was one of the factors resulting in the downgrade. I also heard that load-shedding is on the cards for next year-could this result in another downgrade?
Helen said:
on Friday 14-Nov-14 07:59 AM
Why the country with so much natural recourses and lovely climate conditions so poor in management? Why not to turn this country in the rich and successful place! Dream place to live in! Me as a foreigner from different continent can defiantly say that with so much treasures in this country on this land no other country can come closer!
Melissa said:
on Thursday 13-Nov-14 11:15 AM
This bad news is never going to end. Let's hope for the best.
Cindy said:
on Wednesday 12-Nov-14 03:49 PM
This is so depressing. It just never gets better. Poor South Africa.. Literally POOR South Africa.
Caron said:
on Wednesday 12-Nov-14 03:46 PM
Here here Elektra... see you in NZ!
Sorea said:
on Wednesday 12-Nov-14 02:10 PM
We have such an amazing country. It really is a pity that the government is doing all it can to make it as unpleasant as possible. Aai ...
Sarah said:
on Wednesday 12-Nov-14 08:05 AM
It really doesn't surprise me with the government we have. It is just going to get worse and I really am hoping it doesn't.
Jade said:
on Tuesday 11-Nov-14 02:29 PM
A shift in government priorities will need to take place whereby more money will need to be pumped into infrastructure development. I doubt it will result in lower salaries for government employees, but it may result in a reduction in relief for the poor. A change will have to be made to improve investor confidence.
Alexis said:
on Tuesday 11-Nov-14 09:06 AM
Just more bad news, it just does not seem to end! We are being taken for a ride because of the greediness of the people whom are actually suppose to be taking care of us. They need to look at themselves and the situation and do the right thing....oh wait, that is not going to happen!
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
