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Anything ‘Junkier’ Than Status?

Leago Mamabolo and Geoffrey Shein

South Africa’s president, Jacob Zuma, can be said to be a man who has weathered many storms- and not the good kind, if storms can be said to be any good. Zuma’s 2006 rape trial recently resurfaced in 2016 under the hashtags #RememberKhwezi and #1in3. He has faced scandals involving alleged poisoning by his second wife, arms deal fraud in 2005 with Schabir Shaik, the switching of three finance ministers in one week and his relation to the infamous and influential Gupta family.

The latest in a line of scandals occurred the end of March, as South Africa witnessed Zuma call for a literal ‘groundbreaking’ cabinet reshuffle which resulted in the clearance of up to twenty ministers. A ‘cabinet reshuffle’ can be defined as the rotation and repositioning of ministers by the head of state. This reshuffle in particular can be deemed to be unprecedented due to the fact that former finance minister Pravin Gordhan has been replaced by Malusi Gigaba, former home affairs minister. Another reason being the fact that Minister of Social Development, Bathabile Dlamini, has managed to maintain her spot in cabinet despite her blatant incompetence in the recent SASSA scandal.

 

Zuma states that the reason behind the reshuffle is to improve efficiency and effectiveness within government as well as introduce women and younger members of parliament to enhance the system. Inevitably the markets are not pleased, which has consequentially reduced the country to a junk status by Standard and Poor as well as Fitch. “Junk status” is the colloquial term for the speculative status of the country’s government bonds and foreign investment outlook. This means that South Africa is a risky country to lend money or invest capital in. This status covers investment grade, government bonds and foreign investment.  The confirmation to “junk status” means that the risk on government issued bonds has increased as the ability to honours these bonds is insecure. The impact of this is that interest on borrowing will increase, funding projects outside of the tax revenue will become more expensive and funding for infrastructure and social programmes will have to decrease as the price of these things increase.

This means food, petrol, taxes, loans and transport prices will rise and credit ratings will potentially be reduced as a result of the government paying more to borrow money from high-risk investors. Never mind accounting for public goods and services. For students, this means that interest rates on credit loans will increase. So student loans interest and any other short to long-term loans will become more expensive once the reserve bank increases the interest rate. The cost of living will become more expensive as people see their disposable income decreasing because of higher loan repayments. In essence, only people who have assets and earn interest on those assets will continue to grow.

Above the mayhem is the issue of blackness countering whiteness for being selective about their activism. The 3rd of April #BlackMonday initiative and the 7th of April #SaveSA marches saw great contention throughout the country about the intentions and methods of protest, which many have seen as hypocritical on the part of civil society. Therefore it may be great status appeal for those in power who have laid their loyalties at the president’s feet but what’s junkier than their status for the citizens?

 

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