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Did fimin Mboweni do enough to avoid ratings downgrade?
Under the circumstances, Cas Coovadia, Managing Director of the Banking Association of South Africa, was happy with the Budget Speech today. He told CNBC Africa’s Fifi Peters it was important to put conditions for the utilisation of funds for SEOs, and to make public the details of the Presidential Task Team’s recommendations and how Eskom will be broken up into three, and how the funding will be linked to that. He also gave his opinion of the Budget as a whole and a potential ratings downgrade.
Wed, 20 Feb 2019 14:59:01 GMT
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AI Generated Summary
- Cas Coovadia expresses satisfaction with budget conditions for SOEs and calls for transparency in utilization of funds
- Budget addresses key social service spending and public sector compensation issues under challenging economic conditions
- Concerns remain over potential ratings downgrade by Moody's and the need for detailed debt management plans to regain investor confidence
South Africa's Budget Speech delivered by Finance Minister Tito Mboweni has sparked mixed reactions among financial experts and industry leaders. Cas Coovadia, Managing Director of the Banking Association of South Africa, expressed his contentment with the budget, stating that he is pleased with the conditions set for the utilization of funds for State-Owned Enterprises (SOEs). Coovadia emphasized the importance of transparency in disclosing the details of the presidential task recommendations, particularly in relation to the restructuring of Eskom into three entities and ensuring that funding is directly linked to these changes. He commended the Minister for addressing key issues such as increased spending on social services, education, and the need to address public sector compensation. Coovadia acknowledged the challenging economic environment and highlighted the Minister's responsible approach towards managing the country's finances. However, the looming possibility of a ratings downgrade by Moody's remains a concern. Coovadia stressed the importance of providing detailed plans on how the allocated funds will be used to restructure Eskom and reduce debt levels to appease rating agencies. While urging Moody's to consider the broader context of the budget, Coovadia expressed confidence in South Africa's trajectory towards stabilizing the deficit and regaining investor confidence in the post-Zuma era. The outcome of Moody's assessment will have significant implications for the country's economic outlook and future investments.
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