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South Africa to woo investors at IMF meetings

Gigaba looks to convince investors, rating agencies that economy is on the mend.

South Africa’s finance minister Malusi Gigaba and central bank governor Lesetja Kganyago head to Washington this weekend to meet ratings agencies and international investors in a bid to boost growth in an economy that is emerging from recession.

The Treasury said in a statement on Thursday that Gigaba would use the meetings during the International Monetary Fund and World Bank annual conference to convince investors and ratings firms that the economy was on the mend.

Read: Largest Africa economies need bigger rebound to cut joblessness

Moody’s, Fitch and S&P Global Ratings all downgraded the country’s sovereign credit rating, the latter two to sub-investment grade, following President Jacob Zuma’s abrupt axing of Pravin Gordhan as finance minister in March.

All three agencies have warned that persistently low growth at struggling state firms heavily reliant on government bailouts pose significant risks to the country’s ratings. They are also concerned about political jostling ahead of a conference of the ruling African National Congress party in December to elect a new leader to replace Zuma.

Read: S&P warns SA of downgrade over weak growth, bailouts

“It is important that we continue to engage these stakeholders to discuss interventions on how they can support South Africa’s development process, and to demonstrate our commitment towards addressing their concerns,” the Treasury said in the statement.

The World Bank on Wednesday kept its 2017 economic growth forecast for South Africa at 0.6%, and said the economy would expand below 2% in 2018 and 2019, warning the country needed to urgently rein in political uncertainty.

Read: SA’s economy to grow 0.6% in 2017 – World Bank

On Tuesday, the IMF said it expected South Africa’s economy to grow by 0.7% this year, down from an earlier projection of 1% given in July, saying rising political uncertainty has dented consumer and business confidence.

The leadership contest to replace Zuma as head of the African National Congress (ANC) party has spawned different rival factions and no clear frontrunner, raising political uncertainty. Zuma can remain as head of state until an election in 2019. 

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Good luck – anyone that cannot see that the economy is not on the mend will no doubt invest heavily ne?

Another waste of tax payers money – and a free holiday to boot.

How does a failing African country woo countries to invest in the country. By now Gigabytes should have worked out that investor money can be moved in and out of the country at will, what is needed is investments into infrastructure and policies that support companies expanding operations in this country and exporting the results overseas. Mining in this country in 20 years time will be in insignificant contributor to GDP

Hey Gigs, what’s Norma up to this weekend in Washington. Tea with Donny or just a little shopping.

Until the theft and corruption calms down to a trickle and we have honest (or more honest then presently) Government in place and until Zuma has gone into hiding in the UAE once booted from the Presidency, Mr. Gigaba has more chance of falling pregnant than enticing investors back. He is very good at having overseas trips paid for by the tax payer. He should enjoy the ride until the next President is elected because his butt will be out of there at the first reshuffle of the cabinet.

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