“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.
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.
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.
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