Cape Town – Government and more specifically National Treasury are acutely aware of the gravity of the recent credit ratings downgrades, despite comments made by some members of the Cabinet recently, said Finance Minister Malusi Gigaba on Thursday.
In opening remarks ahead of a question-and-answer session with local investors at Parliament, which was closed to members of the media, Gigaba said the recent utterances by Cabinet members that seem to have played down the impact of the ratings downgrades “have been dealt with”.
“We realise the downgrades are a significant setback,” Gigaba said, “and that it will have an impact on the everyday livelihoods of many South Africans, as well as on government’s ability to borrow money affordably and the private sector’s ability to attract investment.”
Gigaba refrained from naming individuals, but he was in all likelihood referring to utterances attributed to Water and Sanitation Minister Nomvula Mokonyana by the Sunday Times, who allegedly said on a WhatsApp chat group: “It’s actually better Western investors will pull back and we have an opportunity to bring them back in our own terms, after we have consolidated our relations with Africa and Brics. We must rearrange our foreign debt repayments.”
Mokonyane’s sentiments were echoed by SAA chairperson, who like Mokonyane is a close ally of President Jacob Zuma. “I concur cdes,” Dudu Myeni said in response on the WhatsApp group. “Let the rand fall and rise and emerge with the masses.”
At Thursday’s investor briefing, Gigaba said over the medium term National Treasury will do everything in its power to bring South Africa back to an investment-grade sovereign credit rating.
The meeting with local investors on Thursday took place ahead of meetings with the International Monetary Fund (IMF) and World Bank that are set to take place in Washington DC during the course of next week.
In his introduction to the local investment community, Gigaba spoke at length about “inclusive growth” and not about radical economic transformation as he did during previous media briefings.
“We need faster growth to address unemployment, which is top of mind. We need this package of inclusive growth,” Gigaba said, reiterating that the National Development Plan and the nine-point plan as articulated in Zuma’s 2016 state of the nation address, would be the basis from which government would accelerate growth in the economy.
“But all of this would be easier (to implement) if the economy is growing. It would be easier to share a growing rather than a shrinking pie.”
Gigaba emphasised that as new finance minister, he appreciates the skill and expertise of senior managers in National Treasury and that he hopes the position of director-general would be filled internally.
Lungisa Fuzile, current director-general at National Treasury, will leave his position in mid-May and Gigaba said he would do everything in his power to have the position filled by the end of May.
Gigaba also assured investors that there would be policy continuation at National Treasury.
“As a member of the national executive for 13 years I have been privy to the 2017 National Budget Framework, which has been adopted by Cabinet. The Budget doesn’t depend on the whims of one individual.
“I was part of the Cabinet processes that led up to it and I’m bound by that policy framework. There will be continuity in that regard.”