Junk status will hurt

Janine Myburgh, president, Cape Chamber of Commerce and Industry

What ordinary South Africans need to do now is look at the down-to-earth effects of the credit rating downgrade and how junk status will hurt them in their everyday lives.

Overseas investors will withdraw their money and the government will have to pay much higher interest rates to borrow money to service and repay its massive loans such as those which Eskom, SAA and other state-owned enterprises have built up.

Interest rates will go up and the value of the rand will shrink.

In plain language, this means that the value of our savings and pension funds will go down, and the monthly payments on our cars, home loans, credit cards and our medical schemes will go up.

Everything we import like petrol, clothes, food and medicines will cost more. That will mean less money for food, clothes and school fees.

It is the ordinary South African and the poor who will feel the pain. Businesses will have to work together to starve the captured institutions of funds and services until their boards and management positions are no longer occupied by people with tarnished reputations.

There is a great deal we can do if we can find the courage.

It may mean taking risks, but we have reached the stage where the biggest risk of all is not to take the risks.