Gigaba sets off on road show in bid to save SA
• Minister to attend IMF/World Bank Spring meetings • High-profile business leaders will not be part of this trip
Finance Minister Malusi Gigaba sets off on an international road show this week in a bid to restore confidence in SA Inc after two bruising ratings downgrades.
Gigaba will have his first opportunity to meet his global counterparts at the IMF/World Bank Spring meetings, which open in Washington DC on Friday. He will then meet investors in Boston and New York and will also meet ratings agency Moody’s, which has SA on watch for a downgrade.
However, Gigaba will not be accompanied by any of the highprofile business leaders who have in the past year typically accompanied government on road shows to investors and ratings agencies, helping to avert downgrades in 2016.
Gigaba’s spokesman, Mayihlome Tshwete, said a road show that included business would be organised at a later stage. “This was just because of the circumstances, him being the new minister,” Tshwete said.
SA is a key member of the cluster of 23 countries repre- senting Africa at the Spring meetings, which come ahead of the IMF’s important article IV assessment of SA’s economic health in May.
Treasury director-general Lungisa Fuzile said on Monday that issues of inclusive growth would be a prominent feature of the Spring meeting. Fuzile will accompany Gigaba on the road show, as will Deputy Finance Minister Sfiso Buthelezi and Reserve Bank governor Lesetja Kganyago.
“Global policy co-ordination is always key at such forums. More importantly, the question of economic policies that countries are instituting, whether fiscal, monetary, trade and otherwise, will be front and centre of the discussions,” he said.
“Clearly, SA, which has an open economy that trades in a big way with the rest of the world and attracts capital into bonds and equities, wants to have a deep appreciation of global economic trends because they affect our country directly.”
SA also attempted to influence debates in favour of the
country, the continent and emerging markets. It was key to attract investment that would boost domestic economic growth. Slowing growth might pose risks for the fiscal targets set in the February budget, Fuzile said. Treasury’s February growth projection was 1.2% for this year, but the IMF’s most recent forecast, which it will update in this week’s World Economic Outlook, was 0.8%.
Gigaba faces a storm over his new economic adviser, Chris Malikane, a Wits professor who has published a paper calling for radical economic transformation through programmes that include the nationalisation of banks and mines.
David Maynier, DA finance spokesman, said Malikane’s appointment appeared to be the “logical consequence of the minister’s political agenda, which is to implement radical economic transformation and to take on orthodox economists at National Treasury”. He said Malikane’s appointment would reinforce rating agency perceptions that there would be major shifts in economic policy.
However, Tshwete said advisers did not set policy and an adviser was allowed to think aloud. “Neither the ANC nor the president has ever spoken about nationalisation of banks, but an economic adviser can say that.”