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Water crisis threatens not only the Cape, but the entire SA economy

Cape Business News on February 08, 2018

Cape Town's water crisis is likely to have far reaching consequences, not only on the local economy, but on the national GDP. The water crisis threatens further downgrades from ratings agencies, hampering much needed investment, economists have warned.

In a statement last week, Moody’s Investor Services indicated that the water crisis poses a credit risk to Cape Town’s debt rating, which is currently at the lowest level of investment grade – Baa3.

Moody’s added that the city was on review for a downgrade. The ratings agency also said that due to the marked income inequality in the City, Cape Town’s water crisis posed a possible threat to social order. It said the crisis would have wide-ranging consequences for the city finances and economy.

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