South African Finance Minister Pravin Gordhan plans to continue holding meetings with business leaders after he conducted talks with chief executive officers on Monday to discuss strategies to stimulate growth and revive investor sentiment to help avert possible downgrade of the country’s credit rating.
“Government has been very clear about engaging with business and the need for engagement with business,” Phumza Macanda, a spokeswoman for the National Treasury, said by phone Tuesday.
Gordhan will deliver the country’s budget speech on February 24 amid anticipation of a more investor-friendly policy outlook and tighter consolidation of government spending. President Jacob Zuma announced cost-cutting measures and emphasised the need to market Africa’s second-largest economy as a destination for investment in his February 11 address to parliament. This followed meetings held with CEOs before the speech.
“The finance minister expects post the budget to meet again,” Ralph Mupita, CEO of insurer Old Mutual’s emerging markets business, said by phone on Monday. “And the president said he’d like some work being done with an economics task force to put together some plans on driving growth, so there’s continued engagement.”
Gordhan, 66, who was reappointed to the post that he’d held from 2009 to 2014 after a December market rout, has said the government will do everything possible to ensure that the nation’s debt isn’t downgraded to junk. Local markets and the rand plunged to record lows following Zuma’s decision to fire Nhlanhla Nene as the country’s finance minister, replacing him with a little known lawmaker David van Rooyen.
Moody’s Investors Service cut the outlook on South Africa’s Baa2 credit rating, the second-lowest investment grade, to negative in December. Standard & Poor’s, which puts the nation’s debt one level below Moody’s, also changed its outlook to negative.