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SA to unveil stimulus package before ANC conference – Gigaba

We have an obligation to ensure the economy continues functioning, finance minister says.

South Africa will unveil a stimulus package focusing on tourism and manufacturing to turn around the economy, finance minister Malusi Gigaba said on Friday, following a budget speech this week that raised the risk of credit downgrades.

In a speech to investors, Gigaba said Treasury would not wait for the ruling African National Congress’s leadership conference in December to take the “drastic decisions” needed to grow the economy and maintain fiscal consolidation.

Political uncertainty has persisted ahead of the ANC conference where the party will elect a new leader to succeed President Jacob Zuma, who is battling several scandals, including corruption allegations. Zuma denies the accusations.

“We cannot be hamstrung by what is going to happen in December. We have an obligation to ensure the economy continues functioning,” Gigaba said, adding that concrete steps to grow revenue would be announced in the February budget.

In his budget speech on Wednesday, Gigaba said the country’s fiscal deficit for this year was forecast to widen to 4.3% of gross domestic product due to a more than R50 billion ($3.5 billion) revenue shortfall.

He also slashed the growth estimate to 0.7% from 1.3%.

The dire budget forecasts have triggered a selloff of the rand, bonds and financial shares and also raised the stakes ahead of S&P Global Ratings and Moody’s November 24 credit rating reviews of the junk grade-threatened country.

Read: Budget woes raise stakes for November 24 rating reviews

On Thursday Fitch, which already rates South Africa’s local and foreign debt non-investment, warned that Treasury was straying from fiscal consolidation, while S&P said politics were the main hurdle to arresting the fiscal slide. ($1 = R14.30)

COMMENTS   7

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Focusing on tourism hey! Well I’ve cut short my intended 4 week holiday in cpt in jan by half. Why – no water- violence – crime – traffic congestion. I’ll go spend my us$ in Uganda climbing Ruwenzori mts.

Robert – why don’t you just stay at home and go on a pilgrimage to find Crocodile Dundee and his mates

Your reasons for cutting your CTN holiday make no sense…it’s not like foreign tourists are not given water to drink and bathe in; and violence, crime and traffic have been problems for years.

Great! Now that you are not there, Cape Town will be a nice city with only warmhearted, positive and friendly people! All the wingers will be in Uganda!

“tourism and manufacturing”? Well I guess that doesn’t predict anything good for the construction sector. Should have done it long ago, but I’m going to cash in what’s left of my construction stocks, add R200 and have a braai.

Smart shoes and suits but totally economic illiterate. Hope FBI has this great pretender in their sights

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