‘We’re in a tight eco­nomic sit­u­a­tion’

Pretoria News - - NEWS - ANA Re­porter

FI­NANCE Min­is­ter Malusi Gi­gaba is set to meet with sov­er­eign credit rat­ing agen­cies and in­vestors in Wash­ing­ton DC this week as he tries to quell fears about the coun­try’s po­lit­i­cal and fis­cal un­cer­tainty.

Gi­gaba and the Na­tional Trea­sury’s di­rec­tor-gen­eral, Dondo Mo­ga­jane, will be lead­ing a se­nior del­e­ga­tion to rep­re­sent South Africa at the 2017 An­nual Meet­ings of the In­ter­na­tional Mone­tary Fund (IMF) and World Bank Group tak­ing place un­til Sun­day. The Trea­sury said that Gi­gaba, Mo­go­jane, and the South African Re­serve Bank Gover­nor Le­setja Kganyago would hold meet­ings with the in­vestor com­mu­nity and rat­ing agen­cies.

The agenda of the meet­ings in­cludes a statu­tory meet­ing of the IMF and the de­vel­op­ment com­mit­tee of the World Bank Group, meet­ings on the side­lines with fi­nance min­is­ters and cen­tral bank gov­er­nors of the G20, G24, Brics, and the Com­mon­wealth, and bi­lat­eral meet­ings with min­is­ters of fi­nance from ad­vanced economies, and emerg­ing mar­ket and de­vel­op­ing coun­tries.

“It is im­por­tant that we con­tinue to en­gage th­ese stake­hold­ers to dis­cuss in­ter­ven­tions on how they can sup­port South Africa’s de­vel­op­ment process, and to demon­strate our com­mit­ment to­wards ad­dress­ing their con­cerns and restor­ing com­fort and con­fi­dence through the 14 con­fi­dence boost­ing mea­sures, over and above the coun­try’s po­ten­tial to chart an in­clu­sive growth and eco­nomic re­cov­ery pro­gramme,” the Trea­sury said.

Down­graded

Moody‘s, Fitch and S&P Global Rat­ings all down­graded the coun­try’s sov­er­eign credit rat­ing, the lat­ter two to sub-in­vest­ment grade, af­ter Pres­i­dent Ja­cob Zuma fired Pravin Gord­han as fi­nance min­is­ter in March.

All three agen­cies have warned that low growth and state com­pa­nies that rely on govern­ment bailouts pose sig­nif­i­cant risks to the coun­try’s rat­ings. They are also con­cerned about po­lit­i­cal jostling be­fore a con­fer­ence of the ANC in De­cem­ber to re­place Zuma.

Gi­gaba’s del­e­ga­tion will also hold meet­ings on strength­en­ing the con­stituency of­fice in the World Bank and forging eco­nomic part­ner­ships as South Africa shares a con­stituency of­fice with An­gola and Nige­ria that is rep­re­sented by a South African ex­ec­u­tive di­rec­tor at the board of the bank.

Yes­ter­day, Gi­gaba said the Trea­sury would fall short of rev­enue tar­gets it set in Fe­bru­ary and that it would have to re­duce spend­ing and plug the short­fall. “We are in a re­ally tight eco­nomic sit­u­a­tion,” Gi­gaba said. – Ad­di­tional re­port­ing by Reuters

PHOTO: BON­GANI SHILUBANE

Min­is­ter of Fi­nance Malusi Gi­gaba. Bailouts pose sig­nif­i­cant risks to the coun­try’s rat­ings.

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