SA has strong case to remain investment grade - Gordhan

Pretoria – Outgoing Finance Minister Pravin Gordan said work to restore confidence in the economy among investors, businesses and rating agencies has not been undone.

He was speaking at a briefing at Treasury on Friday, following a Cabinet reshuffle in the early hours of the morning which saw him and his deputy Mcebisi Jonas being replaced by Malusi Gigaba and Sfiso Buthelezi, respectively.

“Work with ratings agencies is not undone. Any South African would not want any good work established and confidence generated since 9/12 (a reference to the firing of former finance minister Nhlanhla Nene) to be undone,” he said. “Any undoing of confidence or a decline of the rating status of the country will hurt ordinary South Africans.”

Gordhan said there are good things to note in the country to maintain confidence. Up until Thursday’s events, the rand had been the strongest emerging market currency. The unit was trading at levels as low as R12.30 to the dollar this week still, but spiked beyond R13.60, following reports of the Cabinet reshuffle.

At 13:35 it was trading at R13.37/$.

READ: Rand in freefall as Zuma axes Gordhan, Jonas

Gordhan added that there are “green shoots” in the global economy which could be beneficial for the country. He explained it is important to show stakeholders that reforms such as good governance in state-owned companies are achievable.

“We must convince them that political noise in South Africa is as normal as that in any other society.”

He added: “We have a strong case to remain investment grade unless we shoot ourselves in the foot.”

During his address, Gordhan assured South Africans that Treasury has maintained its integrity and that the staff are committed to a “proud tradition” of managing and maintaining macro-economic stability.

Before returning from the UK leg of the annual investor roadshow on Monday on the president's instructions, Gordhan said he had met with rating agencies Moody’s and Fitch. He also had a teleconference with Standard and Poor’s.

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