Moody’s Says Secrecy Bill Could Affect SA Credit

13 July 2012

A top official for Moody’s has cautioned that passage of the South African secrecy bill could affect the country’s credit rating.

The comments were made in an interview  by Kristin Lindow, Moody’s senior vice-president and regional credit officer for Europe and Africa and subsequently confirmed for by a Moody’s official.

Although South Africa’s current rating is stable, many factors could have a negative influence, the Moody’s official said, such as the high unemployment rate and deteriorating healthcare in the country.

Lindow’s comment on the secrecy bill now pending before parliament is unusual because such transparency matters rarely are addressed by ratings agencies.

The planned secrecy law that “would make exposing corruption or dodgy government deals punishable with prison could also undermine Moody’s assessment of South Africa, said Lindow,” according to the Reuters article.

“To the extent that this leads to a reduced level of public transparency, that could have an impact on our assessment of institutional strength in South Africa,” Lindow said.
“The question is whether or not we see that as a signal of future trends,” she added.

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