The mining industry could be an enormous asset in stabilising and growing the economy post the coronavirus crisis – but the right economic and regulatory circumstances would have to prevail, Minerals Council South Africa stated in a weekend media release.
Post coronavirus, South Africa would need to adopt and implement a set of comprehensive structural reforms to materially improve the country’s competitiveness rankings, grow productivity, generate much higher levels of fixed investment – greater than 25% of gross domestic product (GDP) compared with the current 19% of GDP – raise economic growth, and start reducing unemployment and poverty.
It would only be through the implementation of the necessary economic reforms that the ratings agencies would again take South Africa back to investment grade.
Minerals Council South Africa was reacting to the decision of the last of the three main ratings agencies, Moody’s, to cut South Africa’s credit rating to a level below investor grade.