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Don't bank on political ties - Sexwale

Nov 07 2012 18:03 Sapa

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Johannesburg - Business should not rely on political connections for success, Human Settlements Minister Tokyo Sexwale said Wednesday.

"There is no quick fix to business with reliance on political networks of who knows who," he said in a speech prepared for delivery at the Zimele Conference on Enterprise Development in Midrand.

"In entrepreneurial development there is no substitute for hard work, which is a measure of success."

He said no self-respecting business person would want to be known for relying solely on government contacts and political networks.

Entrepreneurs needed to take a stand against corruption.

South Africa's fragile economic situation was further exacerbated by ratings agencies, Standard & Poor's, and Moody's, downgrading the country's credit ratings.

"This has had a further knock-on effect upon sub-sovereign issuers, including metros and other municipalities and state-owned enterprises, all regarded as financially linked to the national government."

Due to these downgrades, South Africa had effectively moved out of the A and into the B-league.

Through the downgrades the agencies were on the brink of warning financiers to be cautious in handing funds to the government in particular.

"This situation has the negative outcome of putting a damper to our much- needed economic recovery as the cost of capital and that of servicing our national debt has increased."

This had further consequences for capital spend, which was critical for national infrastructure development projects.

He said support and development of small and medium enterprises had to be encouraged for economic growth.
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