CAPE TOWN
- Gigaba was speaking at a Business Report post budget breakfast at the Mount Nelson Hotel in Cape Town on Thursday.
Gigaba said that the situation that the South African economy finds itself in has been caused largely by "own goals". He further explained that policy and political uncertainty left investors and ratings agencies "thinking twice about opening their capital in our country."
The Ministers comments come a day after the rand dropped to a 10-month low yesterday , with weaker growth expectations and rising government debt, following his mid-term budget speech.
At 5.34pm, the rand traded at R14.0250 to the dollar, 1.8percent weaker than its close on Wednesday, and at its weakest level since December 27.
Gigaba said in his medium-term policy statement that the budget deficit was likely to reach 4.3percent of gross domestic product (GDP) in the 2017/18 fiscal year, the highest since 2009. The Treasury’s earlier estimate for the fiscal year was 3.1percent, but the country’s first recession in eight years has hurt revenue collection, while financial difficulties at state-owned firms have weighed on sentiment.
In the wake of this, the Minister has stressed that government needs to provide more certainty in order to give the economy time to recover. "Uncertainty does not help us. We need to be decisive," the Finance Minister said.