What is “junk status”, and why should you care?

by: Live Staff - 4 April 2017

IMG_3822By now, you should know that South Africa has been downgraded to junk status after an emergency S&P (Standard & Poor’s) meeting over the weekend, thanks to President Jacob Zuma’s cabinet reshuffle.

You know it’s not a good thing. But what exactly does it mean? And does it only affect rich people? Should you really not care?

Wrote Musa Manza on the Daily Vox: “The effects of this self-serving idiocy – replacing a competent and trusted finance minister with a pliant and inexperienced henchman – harmed us all, not just the rich white people who still own most of the economy and like to complain about the black government.”

South Africa’s junk status means it’s not attractive to foreign investors, which means less job opportunities for South Africans. In the long run it will lead to higher interest rates making car and house instalments higher, which is where you come in. The price of everything will essentially be higher.

#JunkStatus effectively means a country becomes a defaulting risk because it can’t pay back what it has borrowed,” tweeted the Mail & Guardian last night in a thread explaining in layman terms.

The following thread will make it clear.

Below, are some articles from experts that will make you understand more wha junk status means and what its further implications are.

Why we are now junk: Read the full S&P statement on SA’s credit rating | EWN
What junk status means for South Africa | Business Tech
Downgrade to junk status | TimesLIVE
South Africa is on a cliff edge – just like it was in 1985 | Mail & Guardian
From cabinet reshuffle to junk status in just 90 hours | Mail & Guardian

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