The ruling party has conceded that it does not really understand the implications for government programmes.
While the ANC acknowledges that it does not yet know the full economic effect of SA’s credit ratings downgrades to junk status, the party has conceded that a recession is a possibility.
It said this might mean the government would need to rein in spending to work itself back to investment-grade status.
“We don’t have the full understanding of what the implications are at this stage‚” Enoch Godongwana, chairman of the ANC’s committee on economic transformation, said on Sunday. SA needed to “pull together” to overcome its economic problems, he said.
Acknowledging that party members lacked a common understanding of the fiscal implications of a sovereign credit downgrade on government programmes, he said the party would begin a prolonged period of introspection.