Min­is­ter to meet IMF, World Bank

The New Age (Western Cape) - - Business -

FI­NANCE Min­is­ter Malusi Gi­gaba and Re­serve Bank gover­nor Le­setja Kganyago head to Washington this week­end to meet rat­ings agen­cies and in­ter­na­tional in­vestors in a bid to boost growth in an econ­omy that is emerg­ing from re­ces­sion.

The Trea­sury said yes­ter­day that Gi­gaba would use the meet­ings dur­ing the IMF and World Bank an­nual con­fer­ence to con­vince in­vestors and rat­ings firms that the econ­omy was on the mend.

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

All three agen­cies have warned that low growth at strug­gling state firms heav­ily re­liant on gov­ern­ment bailouts pose sig­nif­i­cant risks to the coun­try’s rat­ings. They are also con­cerned about po­lit­i­cal jostling ahead of a con­fer­ence of the rul­ing ANC in De­cem­ber to elect a new leader to re­place Zuma.

“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,” the Trea­sury said.

The World Bank on Wed­nes­day kept its 2017 eco­nomic growth fore­cast for South Africa at 0.6% and said the econ­omy would ex­pand be­low 2% next year and 2019, warn­ing the coun­try needed to ur­gently rein in po­lit­i­cal un­cer­tainty.

On Tues­day, the IMF said it ex­pected South Africa’s econ­omy to grow by at least 0.7% this year, down from an ear­lier pro­jec­tion of 1% in July.

The world body said ris­ing po­lit­i­cal un­cer­tainty has dented con­sumer and busi­ness con­fi­dence.

The lead­er­ship con­test to re­place in­cum­bent Zuma as head of the ANC party has spawned dif­fer­ent ri­val fac­tions and no clear fron­trun­ner, rais­ing po­lit­i­cal un­cer­tainty.

Zuma can re­main as head of state un­til the na­tional elec­tions sched­uled for 2019. – Reuters

Malusi Gi­gaba

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