Gordhan meets business leaders

As South Africa junk rating looms.
South African Finance Minister Pravin Gordhan met with top business leaders on January 29 to discuss steps to boost investor sentiment and avert a credit rating downgrade to junk.
 
About 60 chief executive officers representing industries ranging from banking to mining met with Gordhan for two-and-a- half hours at Nedbank Group’s offices in Johannesburg, Jabu Mabuza, chairman of Telkom and coordinator of the meeting, said by phone on Monday from the Ethiopian capital, Addis Ababa.

“The point was to recognize that there is a sense of crisis,” said Mabuza, who also chairs the lobby group Business Unity South Africa. Executives “left that meeting feeling very positive and confident that as government and business, we are all looking at the same thing, we are all in agreement about the urgency and the crisis nature of the situation.”

Gordhan is seeking to restore confidence in an economy hit by sliding commodity prices, weak demand from China and policy mistakes by President Jacob Zuma toward the end of last year that pushed the rand to record lows. Standard & Poor’s in December put South Africa’s BBB- rating on a negative outlook, indicating it may downgrade the nation’s debt to below investment grade.

Eskom investment

Executives discussed with Gordhan the steps needed to boost investment, including whether the government should allow private-sector involvement in projects like the Kusile and Medupi coal-fired power plants owned by Eskom Holdings, Mabuza said.

“We have to do everything we can to avert the sovereign downgrade,” Thabo Dloti, CEO of insurer Liberty Holdings, who attended the meeting, said in an e-mailed response to questions. The talks “went a long way into developing and affirming the partnership required between business and government to find practical solutions to the current economic challenges.”

Vodacom Group CEO Shameel Joosub, who attended the meeting, said collective action was needed under current circumstances.

“We were very encouraged by the Minister and Treasury’s determination and commitment, as well as their plans to address the short-term fiscal challenges,” he said in an e-mailed response to questions.

Rand plunge

Also attending the meeting were Lonmin CEO Ben Magara, AngloGold Ashanti’s Srinivasan Venkatakrishnan and Dan Matjila, head of Public Investment Corp., according to a photograph posted on Twitter by Stephen van Coller, head of corporate and investment banking at Barclays AfricaGroup Ltd.

The rand has plunged 14% against the dollar in the past three months to trade at 15.9105 as of 11:35 pm in Johannesburg. Sentiment deteriorated after Zuma fired his Finance Minister Nhlanhla Nene on Dec. 9 and replaced him with a little-known lawmaker. A market backlash that followed forced Zuma to reverse the decision four days later and re-appoint Gordhan to a post he had occupied from 2009 to 2014.

Phumza Macanda, a spokeswoman for the Treasury, didn’t immediately respond to an e-mail seeking comment.

©2016 Bloomberg News

 

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“…policy mistakes by President Jacob Zuma…” So has Gordhan admitted that JZ made mistakes? Are the captains of industry happy that it’s all OK now, he won’t make any more mistakes? Such as the latest threat to leave the ICC? The man is committing treason and must stand down.

If the ANC (not just the Minister of Finance) is serious – and want to kick start the Economy – then create the environment where business can flourish – and pay taxes.
1. Fire Rob Davies and Ebrahim Patel.
2. Reform labour relations legislation.
3. Reduce the size (and cost) of National Provincial and local Government.
4. Prosecute all Civil Servants who steal – including (especially) no 1.
5. Don’t alienate your friends in the West (USA, Britain & Europe) in favour of China, Russia, Cuba and Sudan.
6. Sell off (or give away) all non performing State entities – SAA, Eskom, Denel, ACSA, Telkom, SABC, Post Office, the list goes on and on,,,,,,,,,,,
7. Arrest Shabir Shake and put him back in the hole!
Just a few thoughts Pravin!

I don’t envy Pravin Gordhan. Not only has he to deal with the likes of JZ, rated by Stephen Grootes as the most skillful politician (note skillful, not the most competent) he has come across and then with captains of industry pushing understandably their own narrow perspectives, not to mention the often inane comments by so-called market commentators who seem to enjoy nothing more than making ludicrous and outrageous statements far removed from reality.

So, hats off to Jabu Mabuza for showing real leadership so desperately needed in our country.

End of comments.

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