Gigaba says there is no policy change
Finance minister to reassure rating agency Moody’s
FINANCE Minister Malusi Gigaba says he will seek to avoid a downgrade by Moody’s by assuring the ratings agency that government policy will not change.
Addressing the media at the Treasury yesterday ahead of his trip to the US for an investment roadshow, Gigaba said: “South Africa continues to be an important global player and our opinion is sought on an array of matters.”
Gigaba also said he would use the trip to attract investment.
“We are going to give assurance about the policy direction of the government to Moody’s, and only Moody’s. They are the ones who have not yet downgraded us. They have, however, put us on a 90-day review.”
Gigaba replaced Pravin Gordhan in a controversial cabinet reshuffle announced by President Jacob Zuma at the end of last month. The reshuffle triggered a sovereign downgrade by ratings agencies S&P Global Ratings and Fitch.
Since his appointment, Gigaba has appeared to send mixed signals by speaking of policy continuity but also of “radical economic transformation”.
It also did not help him that he has chosen Wits economics professor Chris Malikane among his advisers.
In an opinion piece published by the Sunday Times, the former Cosatu policy head proposed a new economic plan that includes the “expropriation of white monopoly capital establishments such as banks, insurance companies, mines and other monopoly industries to industrialise the economy”.
Yesterday, Gigaba also said the face-to-face interaction was meant to assure ratings agencies that Treasury’s policies stayed the same.
“We are going to climb back to investment grade. The setbacks we have suffered are very temporary setbacks.”
Gigaba said once the budget was adopted, the government would stick to it and comply with it.
He said he wanted to convey this to the ratings agencies so that they could understand his stance.
“The changes are only in the national executive and not in the policies,” Gigaba said.
“I’m going to say to them simply that we have a resilient economy. Our foreign exchange is doing well . . . we are the second biggest or biggest economy on the continent. We have infrastructure programmes amounting to R1-trillion.”
He said his biggest concern was the balance sheet and the governance of state-owned companies and that he would bring those issues to the cabinet.
Gigaba also addressed the controversy around Malikane, saying there was no contradiction in his appointment.
“Advisers are advisers. They are not the minister,” he said.
“I am my own man. I take my own decisions. I have advised him to keep quiet so I can do my work . . . he comes from an academic background, he needs to learn how government works. Yesterday, I railed him.”
He said Malikane was not his only adviser and that everyone had different options. — BDLive