CT drought could mean further credit downgrade for SA
This is because the lack of access to water is relatively permanent compared to rolling blackouts.
Schussler believes that major industries such as IT, transport, agriculture as well as exports will be impacted as water scarcity limits businesses and causes Capetonians to look for greener pastures.
A water crisis to me is a few times worse.
There’s no rolling blackouts with water.
It’s permanent,” Schussler said.
The ratings agencies look at the overall growth of the country and the population growth.The impact is probably a downgrade.
“This makes the cost of capital more expensive.
According to a report by Moody’s, the water crisis afflicting Africa’s top tourist destination is credit-negative as it will reduce revenue at a time when the city has to boost spending to ensure supplies.
The report doesn’t constitute a rating action, said Moody’s, which has an investment-level rating on Cape Town’s bonds.
“Municipal water revenue contributed about 10% of Cape Town’s operating income in 2017, a proportion that is set to dwindle as the city restricts water usage.