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Zuma: Damaging talk hurts efforts to stave off junk status

Sep 16 2016 16:13
Lameez Omarjee

Pretoria – South Africans need to promote a positive narrative to ignite investor confidence and avoid a credit downgrade to junk status.

This was inferred by President Jacob Zuma, who was speaking at a press briefing on Friday at the Union Buildings. The president gave feedback on the outcomes of the Presidential CEO Initiative, along with meetings with labour and business.

“The intended outcome is to build confidence in the economy and reignite growth and ensure it is inclusive, and help the country avert a downgrade in the country’s sovereign credit rating,” said Zuma.

He added that the country managed to avoid a downgrade in June by building confidence among investors about the country’s prospects. He said the partnership between government, business and labour should foster inclusive growth. “We are encouraged by work done this far. It is encouraging that we are working together, as business, government and labour,” he said.

READ: Moody's credit downgrade likely

He urged all sectors of society to support initiatives that “boost confidence” in the country and the economy and that will boost economic growth and job creation.

“We must refrain from public utterances that promote a negative narrative of country, which undermines confidence in the country and job creation and inclusive growth.” He added that continuing with a negative narrative would undermine the efforts made to succeed. This could be in the light of statements made by businessman Sipho Pityana and Mining Minister Mosebenzi Zwane in recent weeks.

ALSO READ: Zuma not doing black middle class any favours - Pityana

To avoid a downgrade, Zuma said business, government and labour should continue to hold a united front. “All South Africans must be part of team SA,” he said.

Finance Minister Pravin Gordhan added that the country should continue to work to remove obstacles to get business and labour to work together, not just for rating agencies but for the good of all.

In preparing to meet with rating agencies, government will provide sufficient evidence around the prospects for growth, stabilise the financial situation, and commit to fiscal consolidation. “Ratings agencies must see proof that we are taking the steps in the direction we said we would take,” he said.

“We want to stabilise the financial situation in each of the SOEs (state-owned entities),” said Gordhan. He was referring to the new council for SOEs under the president. 

Read Fin24's top stories trending on Twitter:

jacob zuma  |  downgrade  |  economy
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