Downgrades do matter, despite a certain minister's utterances that they don’t, said Banking Association of South Africa MD Cas Coovadia at the African National Congress (ANC) Stalwarts consultative conference, which took place at the weekend at Constitution Hill in Johannesburg.
The conference was organised by long-time members and stalwarts of the movement who have raised concerns around “how the ANC has diverted from its ethics and values under the current leadership”.
Coovadia said during a panel discussion on fostering economic development that if South Africa is further downgraded the country will be in serious trouble.
“It matters primarily to those sectors of our communities that don’t have too many choices. The poorest in our communities don’t have choices. They can’t make plans,” said Coovadia.
He went on to highlight that unemployment, poverty and inequality persisted in the country despite the gains made through democracy.
“There is a serious trust breakdown between business, government and across society. We don’t seem to be talking about what we should be talking about. There is a serious lack of confidence. If you don’t have confidence in the economy [and in the] ability to govern an economy properly you don’t get investments, resulting in minimal investment - which has placed us below 1% in growth,” he explained.
He said the economy was not growing because governance had broken down.
“We have not governed in a way that has put national interest first on the agenda. There are too many other interests. Corruption has been endemic,” he added.
He went on to say that when the ANC goes through a crisis it creates problems in the country.
Coovadia said he was still hopeful that the country could work hard to regain investor confidence.
“We need an economy that is inclusive and that will address the issues [such as] poverty, unemployment and inequality in a way that understands global conditions,” he suggested.
The South African economy grew by 5% between 2001 and 2008 while about a million jobs were created. Coovadia stated that it was possible to do it again.
“We need an economy that goes through confidence restructuring not radical economic transformation. We need small and medium-sized enterprises and more diversified sectors in parts of our economy that ensure that we skill our people for the new economy and make sure that we work together and optimise the resources and capacity we have in South Africa to build our economy,” he stated.