CEOs agree to work with Gigaba, but want state capture inquiry

Cape Town – The CEO Initiative met with Finance Minister Malusi Gigaba on Tuesday, where they committed to work with government and labour to save the economy.

However, they made it clear that an independent judicial commission of inquiry focusing only on former public protector Thuli Madonsela’s State of Capture report was required.

President Jacob Zuma is challenging the report, with a three-day hearing set to be heard in October, dragging out any possible launch of an inquiry. The EFF has demanded Zuma withdraw the legal challenge.

In addition, Zuma on Monday filed a conditional counter-application against the Democratic Alliance's case to force him to establish a Judicial Commission of Inquiry into allegations of state capture.

The CEO Initiative, which was started in collaboration with former finance minister Pravin Gordhan in 2016, met with Gigaba, Deputy Minister Sfiso Buthelezi and director-general Dondo Mogajane following numerous credit rating downgrades.

This followed Zuma’s controversial Cabinet reshuffle in March, which saw Gordhan removed as finance minister.

Fitch downgraded the country’s long-term foreign and local currency debt ratings to junk status, while S&P just downgraded the long-term foreign ratings to junk status. Still one notch above junk status is S&P’s local currency debt ratings and both the long-term foreign and local currency debt ratings of Moody’s. Moody's downgraded these from two notches above junk last Friday.

“A wide range of issues and concerns were addressed, including the need for economic policy certainty from government, strong and ethical corporate governance at state-owned enterprises and a continued commitment to fiscal discipline,” the initiative, led by Telkom chairperson Jabu Mabuza, said in a statement.

“The meeting also saw a discussion of practical ideas for driving inclusive growth, alongside the conditions needed to give effect to these ideas.

“We have also raised the issue of state capture with Minister Gigaba, and stated that this matter needs to be investigated by an independent judicial commission of inquiry, which should focus on the State of Capture report from former Public Protector Thuli Madonsela, as opposed to being widened at this stage."

The CEO Initiative said Gigaba emphasised the need for focus to prioritise areas for growth and regulatory reform, as well as introducing concrete efforts to ensure accountability and timely delivery from ministers.
The CEO Initiative said it is committed to stand alongside government and labour in working to prevent further credit downgrades, which would severely hurt the most vulnerable in society, while continuing with its efforts to promote growth.
“We recognise that our economic challenges are complex, varied and in many instances linked to global conditions, but we are confident that swift action in a number of key areas would go a long way to rebuilding confidence and returning much-needed investment to our country,” it said.

Gigaba is expected to update the media on the road ahead, detailing how government, business and labour will work together to avert any further downgrades and get the sluggish economy out of a recession and turnaround the highest unemployment figures in a decade.

READ: There is no meaningful plan to avert more rating downgrades - economist

Nomura economist Peter Montalto believes it’s too late. He sees Moody’s and S&P downgrading the local currency credit rating to junk status within the next 12 months, which would see between R80bn and R130bn in foreign capital exiting the country.

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