Johannesburg - Finance Minister Nhlanhla Nene is in London together with labour and business as part of a three-leg international roadshow to woo investors and ratings agencies. This follows dramatic changes to the Cabinet after Cyril Ramaphosa's appointment as South Africa's President.
He will also meet investors and bondholders in New York and Boston later this week.
“The purpose of the roadshow is to continue developing relationships with international investors and to provide them with an update post MTBPS (Medium Term Budget Policy Statement, also known as mini budget).
"Roadshows are held bi-annually, post the [National] Budget and MTBPS,” Treasury’s media team said in an emailed response to Fin24.
Nene is accompanied by Deputy Finance Minister Mondli Gungubele, Treasury director general Dondo Mogajane, Eskom chairperson Jabu Mabuza (in his capacity as Business Unity South Africa president), Business Leadership South Africa CEO Bonang Mohale and Dennis George, General Secretary of the Federation of Unions of South Africa.
George said the delegation, which departed from Johannesburg on Sunday, met with bondholders to brief them about the reforms the country is undergoing as well as the February Budget Speech delivered by former finance minister Malusi Gigaba.
“They want to hear it from the horse’s mouth, from business, labour and government," he told Fin24 by phone from London.
George added that there’s a sense of “Ramaphosa euphoria” in meetings with bondholders and other investors in London, but there’s also an acknowledgement that South Africa faces huge problems.
Reuters reported that Treasury plans to use the sense of optimism to tap international bond markets for up to $3bn (about R35.4bn) “shortly”; this could potentially be done in other currencies besides the US dollar, and in tranches.
Nene, business and labour met Moody’s Investor Service in London on Monday. The ratings agency will decide on the country’s credit rating on March 23 after placing South Africa on a 90-day review for a downgrade in October. It is the last of the three large ratings agencies to still rank South Africa as investment grade.
“They asked questions… about economic growth. They asked quite a number of questions about state-owned companies, Eskom in particular,” George said about the meeting.
George said the delegation met Fitch Ratings on Monday and will also meet Standard & Poor's Financial Services on Tuesday.
According to George Nene has received a warm welcome so far. “They’re really glad to see that Minister Nene is back in his position."
Nene's roadshow comes almost exactly a year after former finance minister Pravin Gordhan was recalled from his investor roadshow to be fired a few days later by former president Jacob Zuma in a midnight Cabinet reshuffle on March 30 2017.
Zuma also fired Nene as finance minister in December 2015. The presidency said at the time that he was headed for a job at the BRICS bank, but this never materialised. He was reappointed as minister of finance by Ramaphosa in February’s Cabinet reshuffle.
The delegation will be in Boston on Wednesday and spend Thursday and Friday in New York, before returning to Johannesburg on Sunday.