Gigaba goes into over­drive

CityPress - - Business & Tenders - LE­SETJA MALOPE le­setja.malope@city­

The lat­est credit rat­ing down­grade by Moody’s and an­nounce­ment of an of­fi­cial re­ces­sion have trig­gered a long list of in­ter­ven­tions to be spear­headed by Fi­nance Min­is­ter Malusi Gigaba.

So se­ri­ous is the state of the coun­try’s econ­omy that Gigaba even can­celled a trip to Ger­many. An emer­gency meet­ing with the eco­nomic clus­ter min­is­ters was called by Pres­i­dent Ja­cob Zuma on Wed­nes­day evening and nu­mer­ous meet­ings with eco­nomic stake­hold­ers such as Busi­ness Unity SA, the Black Busi­ness Coun­cil, the Black Man­age­ment Fo­rum, the As­so­ci­a­tion of Black Securities and Investment Pro­fes­sion­als, as well as the Black Investment Man­agers Busi­ness Fo­rum were held.

The lat­est down­grade comes af­ter Moody’s ini­tially put the coun­try on a three-month re­view be­fore de­cid­ing on the down­grade.

Gigaba, dur­ing a me­dia con­fer­ence in Pre­to­ria on Thurs­day, an­nounced that govern­ment had em­barked on a num­ber of in­ter­ven­tions aimed at stim­u­lat­ing in­clu­sive growth.

“At all of these in­ter­ac­tions we have en­gaged frankly on the state of the econ­omy, how to get it back on track, and what short and long-term mea­sures must be taken to ad­vance our na­tional de­vel­op­ment, Gigaba said of the meet­ings al­ready held.

“All three rat­ing agen­cies have raised sim­i­lar is­sues – the slow pace of growth-en­hanc­ing re­forms; grow­ing con­tin­gent li­a­bil­i­ties amid poor gov­er­nance at key sta­te­owned com­pa­nies; and po­lit­i­cal risks, among other is­sues.

“Our sov­er­eign credit rat­ing has a huge macroe­co­nomic im­pact and af­fects govern­ment, busi­ness and or­di­nary South Africans alike.

“We are com­mit­ted to restor­ing it to a favourable investment grade rat­ing with a pos­i­tive out­look as quickly as pos­si­ble,” Gigaba said.

Gigaba said he can­celled his trip to a G20 Africa Part­ner­ship Con­fer­ence in Ger­many ear­lier in the week be­cause he “felt it is crit­i­cal to en­sure that we re­spond ap­pro­pri­ately to the dis­ap­point­ing eco­nomic per­for­mance of the first quar­ter”.

He fur­ther pointed out that govern­ment had been deeply con­cerned about the re­ces­sion and was con­sid­er­ing an ap­pro­pri­ate re­sponse, a mat­ter which was dis­cussed in the re­cent Cabi­net meet­ing.

Gigaba said govern­ment has, how­ever, made some progress, but this would only be vis­i­ble at a later stage. It was still com­mit­ted to main­tain­ing the fis­cal frame­work an­nounced in the bud­get and the medium-term strate­gic frame­work.

“We have heard the call from busi­ness and in­vestors that pro­vid­ing pol­icy cer­tainty and sta­bil­is­ing and re­vi­tal­is­ing state-owned com­pa­nies are among the most im­por­tant short-term steps we can take to re­store con­fi­dence.

“Fi­nally, in­clu­sive growth and eco­nomic trans­for­ma­tion are the top pri­or­i­ties of govern­ment, and are mu­tu­ally re­in­forc­ing.

“We must, and will, ad­vance both of these,” Gigaba said, adding that there was no­table progress as, though there was con­trac­tion over the last two quar­ters, the econ­omy ex­panded by 0.6% on a year-on-year com­par­i­son be­tween the first quar­ter of 2016 and the first quar­ter of this year.

“We can still work hard to en­sure that this is held up for the rest of the year.”

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