‘Rumours of another cabinet shakedown hurt investor confidence’
RUMOURS of another cabinet reshuffle are contributing to political uncertainty and denting investor confidence in South Africa‚ Finance Minister Malusi Gigaba said yesterday.
“As government‚ you don’t want those rumours at all‚” he said at a post-budget breakfast in Cape Town.
“South Africa has been affected by own goals‚ which has created policy uncertainty and political uncertainty.
“This uncertainty contributes to the negative outlook ratings agencies have given us because they don’t know which direction the country is going to take,” Gigaba said.
“We would do well‚ as a country‚ if we provided greater certainty to investors and rating agencies so we can give the economy time to recover.”
After a candid budget that underwhelmed and sent the market into a frenzy‚ Gigaba said someone had to do the tough job and tell the nation.
“Anyone in this position would have liked to say the economy is growing‚ that we have a budget surplus and revenue buoyancy. “The books are what they are.” Despite criticism that he has kicked the can down the road‚ Gigaba said he could not wait until the ANC electoral conference – in December – to make revisions.
“Everyone knows the economy is in crisis‚ not on December 22‚ right now.
“We need to take the decisions now. They will blame us if we do not take the tough decisions now.”
Gigaba said the government needed to increase the scale and pace of structural reforms‚ reduce the debt of state entities‚ improve their governance and build confidence through a stimulus programme for manufacturing and tourism.
In terms of state-owned entities (SOEs)‚ Gigaba said: “Eskom is by far the biggest risk we face as a country.
“We need to deal with Eskom very carefully and improve governance as a matter of urgency.”
National carrier SA Airways should promote a trigger effect at Eskom and other SOEs, he said.
About a nuclear programme‚ Gigaba said there was no misalignment in this regard with the rest of cabinet.
“Over the next five years‚ South Africa will not be able to afford nuclear energy because the economy is growing too slowly.
“We can’t afford it‚ we have excess electricity.” – BusinessLIVE