Johannesburg - Finance Minister Pravin Gordhan has said he was “hopeful” the country could avoid a credit rating downgrade when rating agency Moody’s visited next week as the government had decided it needed to do “something different” which “not only surprises the markets, but begins to energise our people as well”.
Gordhan was speaking to Bloomberg Television in New York in the course of a “road show” to the US and UK, where he and a team of business leaders, Treasury officials and union leaders have been wooing foreign investors.
Moody’s announced this week it would be visiting the country after placing it on review for a possible downgrade.
Gordhan said he would be meeting the agency in London to discuss the review.
Its visit to South Africa was intended to “re-establish their fact base, talk to South Africans face to face, and to establish whether our narrative matches our actions in the short term”.
Asked whether the country would be able to make its case to Moody’s that it should retain its current rating of two notches above junk status, Gordhan said it was understood “doing the same old things isn’t going to get us where we need to get”.
Commenting on the controversial circumstances in which he was appointed, following the firing of Nhlanhla Nene and brief tenure of Des van Rooyen in the post, Gordhan said the way to address concerns over the upheaval was for him to do the job he had done for five years previously, “with a very good team at the national treasury, very high levels of credibility both within South Africa and across the globe”.
“And continuing to reinforce the message that the country’s finances are in good hands, that we intend to be prudent, and that we will demonstrate and practise what we say in words, that is, fiscal consolidation, and that we will try and build – which we are doing now – the right kind of consensus to get all of the role players to focus on growth as the key issue.”
He said changing “the denominator” – growth – would “change everything else”.
Investors he had spoken to in the course of his overseas trip had been concerned about lower growth, whether the country would be able to stick to the fiscal consolidation plans he announced in his Budget and whether the government would succeed in crafting a partnership with the private sector.
“Now with respect to all of these, we’ve been doing some work which does provide some reassurance,” Gordhan said.
The government was working on boosting the energy supply and would be seeking further private sector participation in renewables, coal and gas projects.
It would also focus on “concrete actions which deliver upon our plans and take on some of the tough structural issues”, including reform of state-owned enterprises.