SA’s political leaders seems to be on their toes with regards to the outcome of the Standard & Poor’s ratings. President Zuma, yesterday, was with Finance Minister Pravin Gordhan and his team discussing ways to improve SA economy
The four hours meeting on Tuesday centered on how to take “forward the programme of reigniting growth, following the recent announcements by credit rating agencies”.
S&P Global Ratings affirmed the investment grade rating of Africa’s most industrialized country on Friday and the government plans to quickly strategize means through which the nation’s global and domestic economic is pushed forward.
“They discussed the global and domestic economic situation and how to strengthen support to state owned companies.” government’s communication team GCIS said on Tuesday.
Though SA economy was not rated to junk level by the S&P, it however, warned in its review on Friday that a lack of political cohesion among the executive branch is a major issue the south African government ought to deal with.
“Political tensions have increased in South Africa since the removal of former Finance Minister Nhlanhla Nene on December 9, 2015; the Constitutional Court ruling against President Jacob Zuma on March 31, 2016; and periodic disputes between key government institutions and within the ruling African National Congress (ANC),” it said.
The rating agency believed that the political factors could have more effect on investor confidence than inconclusive labour or mining sector reform geared to improve SA economy
On this note, Gordhan said improving SA economy and and creating jobs should remain on the top list of the government in order to avoid a downgrade to “junk status” by the Fitch.
We must demonstrate to the world that we are capable of raising growth above the 0.6 and 0.7% mark and begin to head to the 2% mark,” Gordhan said during an interview on SABC television.
Meanwhile, the presidency has laid- off claims that Zuma was planning to take down the finance minister like he did the former minister Nene.
The Presidency said two weeks ago that it is absurd to say Zuma would be “engaged in a struggle to control a government department that he already controls, and also when he actually controls the whole of government”.
“The primary objective of the president and government is to unite the nation behind the goals of reigniting growth in order to preserve and create jobs during the difficult economic climate.”
Ratings agency Fitch is set to announce its review findings at the end of Wednesday,and many believe that the firm would also not downgrade the country to junk status.