Many countries had been there and many of them had pulled themselves out of junk status, he told a function organised by the Motor Industry Staff Association on Friday. But he stressed that it was extremely important to understand the consequences of junk status and also what the country needed to do to work itself out of this situation.
Gordhan said the last 15 months from January last year and “that fateful day” when he was requested to return from an investor roadshow in the UK and the US was proof that business, labour and government, despite their disputes, could find a common platform and work in the national interest. He and deputy finance minister Mcebisi Jonas were dismissed in a cabinet reshuffle after their return to the country, which contributed to the downgrading.
Gordhan said two important projects had come out of the collaborative effort by business, labour and government: the Small Business Fund of R1.5 billion of private sector money and the Youth Employment Scheme.
“If we can get more projects of that sort going, we can show that despite the kind of period we are going through at the moment we can get our act together as South Africans and produce the goods that are necessary,” he said. Gordhan said business leaders were trying to get this partnership back on track when they met President Zuma a week ago.
He stressed there was still room for hope and huge potential to exploit, but also factors that were undermining this, including state capture and corruption.
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In a reference to the Gupta family, which has close ties to President Zuma, Gordhan said: “This business of a particular family coming from somewhere and having the kind of influence that they have in our country is just unacceptable. The fact that they can capture our institutions and direct them for their own purposes or the purposes of themselves and their friends is equally unacceptable.
“Let’s wisen up to what is happening in our country. Let’s wisen up to how this country’s resources could be abused for the wrong purpose and for the purposes of benefitting a few at the expense of the vast majority,” he said. It was in the national interest that the country got rid of this “disease”, because it was undermining South Africa’s sovereignty.
He said there were many consequences of downgrades. They resulted in lower growth and lower revenue, which meant either higher taxes or cutting expenditure while increased borrowing costs meant government’s disposable income was “squeezed and will impact on ordinary folk”.