South Africa's President Jacob Zuma facing pressure on Tuesday (April 4) after S&P downgraded the country's credit level to ''junk''. Mia Womersley reports.
Markets in South Africa tumbling on Tuesday - a reaction to S&P cutting the country's credit rating to junk. It says President Zuma's dismissal of his respected finance minister signalled a damaging policy shift, prompting a selloff in South African assets - the rand, bonds and banking shares all falling. It's the country's first downgrade since 2000. Pressure now likely to mount on President Zuma. His cabinet reshuffle provoked widespread public criticism from within his ruling African National Congress, threatneing to split the upper echelons of the party. New Finance Minister Malusi Gigaba says he will maintain Pretoria's current fiscal stance and pursue "tough and unpopular choices" to oversee a redistribution of wealth to the black majority. The downgrading will almost certainly lead to a rise in government debt-servicing costs. That will mean less money for critical services like housing, education and sanitation - a potential catalyst for even more protests like those that have already rocked towns across the country. The rand has fallen 11.5 percent since last Monday (April 3), when former finance minister Pravin Gordhan was recalled from a business trip. With Moody's also reviewing South Africa for a downgrade, there could be more turmoil ahead.