More determined to win the hearts of both South Africans and foreign investors and to strengthen the nation’s economy, new finance Minister Gigaba has taken off to the US for talks with foreign investors.
Like former finance Minister Pravin Gordhan who before he was recalled, undertook a trip to the UK and US to encourage investors to look towards SA, the new treasury head Gigaba took up his very first international trip but this time, without labour and business at his side.
The trip to the US was to attend the forthcoming IMF and World Bank Spring Meetings and to hold further interactions with rating agencies.
Gigaba’s trip follows the recent downgrade to Junk status by S&P and Fitch agencies which has left South Africans in the fear of what the nation’s economic future will be like.
According to report from media and research officer, Frank Nxumalo, business teams like FEDUSA were not invited to join the minister on his business trip as was done by past finance ministers.
Deputy Cyril Ramaphosa who received report of Gigaba’s trip on Tuesday pledged his full support to the minister saying he believe he would give his best in making sure investors turn to South Africa.
Ramaphosa, who is also the chairperson of the Inter-Ministerial Committee on reform of state-owned enterprises, said his meeting with Minister Gigaba on Tuesday is part of continuous internal government briefings.
Tuesday’s meeting came after the minister met with domestic investors and the National Economic Development and Labour Council (Nedlac) special executive committee where the minister discoursed a way out to the nation’s current challenges
A high level Nedlac task team will also to be briefed by National Treasury. It will meet regularly to co-ordinate South Africa’s all-round efforts to respond to the current challenges.
While the deputy President sings the praise of the finance minister, Dr Kenneth Creamer, economist from Wits University, said it is unfortunate that Gigaba will not be flanked by Team South Africa’s business and labour representatives at his upcoming meetings.
He however, noted that despite this omission, there are numerous good signs indicating that Gigaba is taking his portfolio very seriously and is doing his best to adapt to the rigours and responsibilities of his new position.
“He has taken time to meet a wide range of decision makers in the South African economy and has exchanged ideas with labour, business and community representatives at Nedlac,” said Dr Creamer.
Leader of campaign Save South Africa Sipho Pityana who is also a businessman said about Gigaba’s trip, there would be “strong debate” among business and labour on whether to support such a roadshow.
He further explained that when President Jacob Zuma recalled Pravin Gordhan from his UK trip, it was a “kick in the teeth” for business and labour representatives who accompanied Gordhan on his trip and for the team to accompany Gigaba now will be like attending an “altar of fools”.
He also noted that it is significant that although certain Cabinet ministers seem to misunderstand the gravity and negative consequences of South Africa’s credit downgrade, Minister Gigaba believed the downgrade brings a major setback to the nation’s economy.
“In fact, he has boldly stated that it is his intention to steer South Africa back to an improved credit rating. In making this commitment, Gigaba has set himself no easy task, as a ratings upgrade would require a sustained improvement in South Africa’s debt position and would entail him enforcing tight fiscal and governance controls, both in government departments and in state-owned companies, over a number of years, in order to rebuild South Africa’s financial credibility,” said Dr Creamer.
Minister Malusi Gigaba has been on hot seat since his new appointment as the finance minister in Zuma’s latest cabinet reshuffle. The minister has been at his best to gain back people’s confidence in his ability to do better job than his predecessor Gordhan who has already won the people’s heart through his drastic moves to ensuring a faster economic growth.
Minister Gigaba acknowledged that the contingent liabilities of SOEs, which was also raised as a concern by ratings agencies Standard & Poor’s (S&P) and Fitch when downgrading South Africa to junk status last week, needs to be addressed urgently.
“We are acutely aware that SOEs need to be managed well in order to be engines or enablers of inclusive growth, rather than a drag on it. One of our top priorities will be to work closely with the Presidency and the economic cluster to stabilize our key SOEs,” Minister Gigaba said.