Real problem is government not working together to avoid “junk status” 

 14 March 2016

We welcome Minister of Finance Pravin Gordhan’s press conference following his investor roadshow abroad aimed at boosting investor confidence in South Africa.

1. Ratings Downgrade

The Minister is clearly demonstrating his commitment to ensuring government, business and labour working together to avoid a ratings downgrade to “junk status” in South Africa. 

However, the real problem is that government itself is not working together to avoid a ratings downgrade to “junk status” in South Africa. 

What we really need is for at least the Minister of Finance, Pravin Gordhan, the Minister of Economic Development, Ebrahim Patel, the Minister of Trade and Industry, Rob Davies and the Minister of Public Enterprises, Lynne Brown, to demonstrate that they are capable of working together to avoid a ratings downgrade to “junk status” by implementing new measures: 

to boost economic economic growth

tighten the fiscal consolidation path; and

the privatisation, or partial privatisation, of state-owned enterprises.

However, this is highly unlikely, due to President Jacob Zuma’s government now so divided that it seems incapable of taking the hard decisions and then implementing the hard decisions necessary to avoid a ratings downgrade to “junk status” in South Africa.

2. “State Capture” 

It is a pity that the Minister did not take the opportunity to clarify whether it is true that Deputy-Minister Mcebisi Jonas attended a meeting with Atul Gupta, Ajay Gupta and Duduzane Zuma, two weeks prior to the former Minister of Finance, Nhlanhla Nene, was fired on 09 December last year. The Minister’s response could have stopped the bleeding, but it is now likely to fuel speculation that the reports are indeed true.

Issued by David Maynier, DA Shadow Minister of Finance, 14 March 2016