Cape Town - Deputy President Cyril Ramaphosa was upbeat this week that South Africa would avoid a credit rating downgrade in the coming days.
This comes as Ramaphosa was to chair a critical meeting today on labour issues relating to strike balloting and a national minimum wage.
South Africa is scrambling to avoid a credit rating downgrade amid labour uncertainty and political infighting.
Some of the rating agencies were in the country this week to meet with top government officials.
Deputy Minister of Finance Mcebisi Jonas told Parliament this week he had met with Fitch and said the rating agencies wanted assurance on fiscal consolidation and growth targets.
This was one of the key conditions they gave South Africa when they released their first results in June.
Fitch said South Africa needed to urgently implement structural reforms.
Ramaphosa also said this week they had met with Fitch and Moody’s and they wanted certainty on labour matters.
The meeting on Sunday would signal the direction South Africa would take, and the potential outcome of the review by the rating agencies.
Moody’s will announce its results on November 27 followed by Standard & Poor’s on December 2.
Confidence
Fitch was expected to announce its results during the same period. President Jacob Zuma expressed confidence that the country would avoid a credit rating downgrade.
Experts have warned that junk status would make things difficult for South Africa, increasing the cost of borrowing and leading to job cuts and an outflow of capital.
South Africa’s partners in Brics (Brazil, Russia, India and China) have also been battling economic demons.
Brazil and Russia were downgraded to junk status a few months ago. Finance Minister Pravin Gordhan has been leading a team of 80 chief executives of top companies to prevent a downgrade since the beginning of the year.
The team wants to reignite growth in the economy and improve industrial relations.
But Jonas said this week growth was one of the key areas the rating agencies were looking at.
In 2010 the government set a growth target of 5 percent by 2019, but has since revised this target because of the tough economic conditions.
The growth target for this year has been revised to less than 1 percent, and the Treasury is optimistic the country will get to 1.7 percent next year and 2.5 percent in the following year.
Gordhan said South Africa had an average economic growth rate of 4 percent before the global economic crisis of 2008/9.
Since then things have hovered below that range and it was not easy to get out of the woods.
But Gordhan has said recently green shoots were beginning to emerge.
Political Bureau