We’ve been a victim of own goals: Gigaba
Rumours of another cabinet reshuffle are contributing to political uncertainty and denting investor confidence‚ according to Finance Mnister Malusi Gigaba.
“As government‚ you don’t want those rumours at all‚” Gigaba said at a post-budget breakfast in Cape Town.
“South Africa has been affected by own goals‚ which has created policy uncertainty and political uncertainty. Such uncertainty contributes to the negative outlook ratings agencies have given us because they don’t know which direction the country is going to take.
“We would do well‚ as a country‚ if we provided greater certainty to investors and rating agencies so we can give the economy time to recover.”
After a candid budget that underwhelmed and sent the market into a frenzy‚ Gigaba said someone had to do the tough job and carry the news to the nation.
“You’d like to be the bearer of good news. Anyone in this position would have liked to say the economy is growing‚ that we have a budget surplus and revenue buoyancy … the books are what they are.”
Despite criticism that he has kicked the can down the road‚ Gigaba said he could not wait until the ANC electoral conference in December to make revisions.
“Everyone knows the economy is in crisis‚ not on December 22‚ but right now. We need to take the decisions now. They will blame us if we do not take the tough decisions now.”
He said government needs to increase the scale and pace of structural reforms‚ reduce the debt of state entities‚ improve their governance and build confidence through a stimulus programme for manufacturing and tourism.
In terms of state-owned entities (SOEs)‚ Gigaba said: “Eskom is by far the biggest risk we face as a country. We need to deal with Eskom very carefully and improve governance as a matter of urgency.”
He said national carrier SAA should promote a trigger effect at Eskom and other SOEs.
Speaking about a nuclear programme‚ he said there is no misalignment in this regard with the rest of cabinet.
“Over the next five years‚ South Africa will not be able to afford nuclear energy because the economy is growing too slowly.
“We can’t afford it‚ we have excess electricity. The budget can’t afford it and the country can’t afford it.”
He said the economy may require nuclear energy at some stage‚ but emphasised that SA could not currently afford it.