Minister to meet IMF, World Bank
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