Cape Town - South Africa is pulling together to weather the country's economic woes in the wake of a bruising blow from ratings agencies.
Plans are in motion to form a high level task team from business, labour and government in response to the downgrading of South Africa investment status by Standard & Poor’s and Fitch.
The National Economic Development and Labour Council (Nedlac) on Tuesday called an urgent meeting to assess and respond to the challenges facing the country, the Presidency said in a statement.
"The Nedlac social partners have agreed to establish a high level task team to be briefed by National Treasury, on an ongoing basis, to co-ordinate our all-round efforts to respond to the current challenges."
The meeting was chaired by Deputy President Cyril Ramaphosa at the invitation of Nedlac's social partners - business, labour and the community.
Finance Minister Malusi Gigaba briefed the group on government’s views on the sovereign downgrades.
"The meeting expressed concern about the impact the downgrades would have on the economy in general and the quality of life especially for the poor and working class, on job creation, sustainability of business, including small businesses and the ability of big companies to grow and create jobs, infrastructure projects and social reforms."
A sub-investment grade sovereign credit rating will dampen economic growth in South Africa, which in turn directly affects job creation, growth in per capita income and the ability of consumers to keep up with inflation.
The new finance minister also outlined steps that should be undertaken to avoid a further downgrade and a return to investment grade.
"Informed by our past experience in dealing with the 2008 challenges of the global economic crisis, the meeting expressed confidence in the ability of Nedlac social partners to act together and constructively assist the country to mitigate the impact of the downgrade."
The Presidency noted that members agreed on the need for a consistent and confidence-building message that demonstrates South Africa’s commitment to accelerated inclusive growth.
Labour Minister Mildred Oliphant, Deputy Finance Minister Sfiso Buthelezi and other senior government officials were also at the meeting.
Hope for the youth
Job creation for the youth will remain a crucial point to the task team, Federation of Trade Unions South Africa (Fedusa) general secretary Dennis George, who was at the meeting, told Fin24.
There will also be continued focus on the establishment of township entrepreneurs and agricultural entrepreneurship programmes to ensure access to the economy.
George added that labour and other social partners will play a bigger role in the Budget review process to ensure transformation of the economy through the implementation of structural reforms.
SA needs to pull together like never before
Dr Kenneth Creamer, economist from Wits University, told Fin24 the downgrades provides a clear signal that the country is going to have to pull together like never before to overcome our problems.
He said in addition to increasing political uncertainty as a result of Zuma's highly questionable Cabinet re-shuffle, there are a number of very difficult economic problems that need to be tackled head-on.
"Our national debt is rising too fast and needs to be brought under control. Financial problems at Eskom and SAA as well as the low rate of compliance with Gauteng's e-toll system are compounding South Africa's economic problems and have contributed significantly to the downgrades by S&P and Fitch."
Dr Creamer said it is a time for South Africans to be sober and serious.
"It is not a time to be fooled by lies and misleading rhetoric. Every effort must be made to put the country onto a path towards improved financial health. This is crucial for the sake of long-term inclusive growth in the South African economy."Read Fin24's top stories trending on Twitter: Fin24’s top stories