Coalition govt will make it difficult to address challenges: Moody’s

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Rating agency Moody’s has warned that a coalition government after the election could make it difficult for the country to deal with some of the longstanding challenges.

In a statement released on its website, Moody’s cautioned that a lot depends on the election outcome and the balance of power, in the event of a coalition government.

It says the administration that takes power following the May 29 general election will face structural issues, including sluggish economic growth, chronic power shortages and very high unemployment.

According to the statement quoting Moody’s Vice President and Senior Credit Officer, Aurelien Mali, the current government has made progress on these issues.

However, Mali says the new administration’s mandate could make the already complicated management of fiscal, economic and social policy objectives more difficult.

Moody’s says the election raises the possibility that policies not friendly to investors, will emerge.

The rating agency has expressed confidence that the African National Congress (ANC) will remain the dominant political force in South Africa, even within a ruling political coalition.

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