South Africa faces severe crisis, warns business body | Fin24
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South Africa faces severe crisis, warns business body

Sep 23 2016 08:41

Cape Town - Business Leadership South Africa (BLSA) wants the government to deal with concerns about threats to the Treasury and the financial sector.

BLSA is an independent association whose members represent South African big business leadership and major multinational investors.

In a statement on Thursday, the group said that nothing has been done to allay the concerns they outlined in an open letter to President Jacob Zuma in August.

READ: Open letter to President Jacob Zuma: Hands off Gordhan

In the letter, BLSA warned that attacks on Finance Minister Pravin Gordhan by the Hawks threaten to devastate the economy.

This followed a requets by the Hawks that Gordhan and other former SA Revenue Service (Sars) officials to appear before the elite crime-busting unit to receive letters of warning regarding an investigation unit set up when Gordhan was Sars commissioner from 1999 to 2009. Gordhan defied this request.

The Hawks investigation of Gordhan, BLSA said, "lacks any legitimacy or credibility". It suggested that if there is to be an investigation into this issue, it should rather be conducted by a credible institution such as the public protector.

"To date, nothing has been done to allay our concerns," said BLSA on Thursday.

"Instead the announcement, by Minister of Mineral Resources Mosebenzi Zwane, of a proposed Commission of Inquiry into the four major banks, followed by its repudiation by the presidency have just added to concerns about attempts to undermine the minister and the National Treasury."

It reiterated that the Sars probe should be handled by the public protector, whose mandate is to investigate maladministration and abuse of power in state affairs.

Glimmer of light

However, BLSA also pointed out that it has seen a glimmer of light behind the scenes.

"Business and government, led by the president and the minister of finance, have been working together to put in place measures to prevent a credit ratings downgrade, restore investor confidence, and increase inclusive growth for our economy," it said.

"We believe that there are signs that both parties are starting to make the necessary commitments and sacrifices to address our national challenges. We thus urge government to more actively demonstrate that focus on delivering on its promises to support the economic environment, improve the governance of state-owned enterprises, and be purposeful in uprooting corruption."

BLSA said the most urgent of these steps include ensuring that:

- Government policy on electricity generation from independent power producers is unchanged and both existing and further requested contracts are honoured;
- The new South African Airways board produces a credible plan for financial sustainability within a specified time; and that
- The president expeditiously signs into law the new Fica Act passed by Parliament.

It aded that the group is seeking further meetings with the president and senior members of the government and the ruling party to address these issues.

"The crisis South Africa faces is severe and we need to ensure we have the stability in our economic governance institutions necessary to turn the corner and build an inclusive economy that benefits all South Africans."

Read Fin24's top stories trending on Twitter:

sars  |  hawks  |  pravin gordhan  |  jacob zuma  |  sa economy


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