With the dark cloud of ‘junk’ status looming ever closer, Finance Minister Pravin Gordhan is due to deliver what is likely to be his ‘most important’ and ‘most watched’ budget address. But what methods does Gordhan have at his disposal to sidestep a downgrade? Well known economist Brian Kantor believes that austerity won’t be enough to improve the credit rating, and instead believes privatisation would do the trick.
He mentions the obvious choice of South African Airways (fully or partially) as well as a listed private share in the Airports Company of SA. It’s an interesting read and one wonders if the ministry is listening to this and what’s likely another million and one ideas to save South Africa. – Stuart Lowman
By Brian Kantor*
Austerity will not be enough to improve the RSA credit rating. Privatisation will be essential to achieve this.
The 2016-17 SA Budget to be presented on 24 February is set to be an austere one. A mixture of higher tax rates and faster growth in tax revenues seems bound to accompany slower growth in government expenditure. The objective will be to reduce the debt to GDP ratio and to impress the rating agencies accordingly.