Supplementary Budget 2020

Ignore ratings advice, Cosatu tells Nene

Finance Minister Nhlanhla Nene. (Treasury)
Finance Minister Nhlanhla Nene. (Treasury)

Johannesburg - Cosatu has urged Finance Minister Nhlanhla Nene to ignore advice from ratings agencies in his medium-term budget policy statement on Wednesday afternoon.

"He should definitely ignore advice from ratings agencies... and the army of capitalist analysts, commentators and experts who are bombarding him with instructions to move in... the opposite direction to the ANC," Congress of SA Trade Unions spokesperson Patrick Craven said.

"They want him to prioritise policies to reassure business investors that their profits are secure and that they can continue with business as usual."

In June, Fitch ratings agency revised the country's outlook from stable to negative. In the same month, Standard & Poor's lowered South Africa's long-term foreign currency credit rating one notch, to BBB- from BBB.

In August, Moody's downgraded the credit rating of four top South African banks, after government was forced to bail out troubled lender African Bank.

Standard Bank [JSE:SBK], Absa [JSE:BGA], FNB, and Nedbank [JSE:NED] were downgraded one notch to Baa1.

Cosatu hoped Nene's speech would be based on the "progressive" policies adopted by the African National Congress at its 2012 Mangaung conference, and its commitment to a radical economic policy shift.

"It is precisely such policies which lie at the root of the crisis which the ANC government is committed to resolve, the triple challenges of unemployment, poverty and inequality," said Craven.

Craven said Nene had to spur job creation and bring down the high unemployment rate.

The trade union federation wanted clarity from Nene on how South Africa's nuclear power deals would be financed.

"Cosatu remains opposed to nuclear energy because of a myriad of problems associated with it, including its demands for massive amounts of resources," he said.

On Sunday, the energy department said it had held meetings with different countries and signed agreements to build nuclear power stations in the country.

The department's deputy director general Zizamele Mbambo said it wanted to add 9 600 MW to the national electricity grid.

He said government had held talks with the United States of America, South Korea, Russia, France, Japan and China.

South Africa has so far signed deals with the US, South Korea, Russia, and France. The country is expected to sign a deal with China in the first week of November, and with Japan at a later date.

Nene is expected to present his budget speech in parliament at 14:00.

* Visit Fin24's Mini Budget Special for all the news.

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