JOHANNESBURG – South Africa is making progress towards avoiding rating downgrades despite the economy not growing fast enough, Finance Minister Pravin Gordhan told a trade union gathering on Wednesday a week before reading his mid-term budget speech.
Ratings agencies have warned they could cut the country’s credit rating to “junk” by year-end if the country does not lift growth to at least 1% annually.
“As a country we have to understand that unless we solve the low growth problem, we don’t have fiscal resources required for all needs,” Gordhan said.
“The ratings agencies will say these promises that you guys made between March and June this year, you gave us milestones that you would cover, how much have you done? I believe we can begin to show a report card that does indicate some progress.”
After giving his speech, Gordhan told reporters in response to a question that his relations with President Jacob Zuma were “good” and that he was busy preparing for the medium-term budget policy statement.
“He is my president so I have to have very good relations with him,” he said.
Fraud charges against Gordhan were unveiled by state prosecutors last week and his supporters and analysts say these could be aimed at discrediting the minister for defying close allies of President Jacob Zuma, who has said that the presidency is not at war with Gordhan.