Following President Jacob Zuma’s State of the Nation Address on 11 February, the Minister has said that the country would have to wait for the Budget Speech to hear what government will do to avoid an investment downgrade.
In his reply to his State of the Nation Address debate, the President said avoiding a sovereign downgrade was a top priority, and that after fruitful meetings, both government and CEOs of top companies agreed that a solid partnership was required between the two sectors in order to stimulate investment.
Stimulating investment is key to keeping South Africa’s economy in a good state and government has announced the opening of Invest SA, a one-stop-shop aimed at removing bottlenecks to make doing business easy for investors.
While there are global pressures, including a slump in commodity prices that has affected emerging markets, President Zuma urged all sectors of the economy to focus on addressing domestic constraints like energy, among others.
Minister Gordhan said business partnerships remain one of the key steps towards ensuring the economy does not take a further knock.
“… we are making every effort to partner with the business sector, to get an understanding with trade unions as well, and basically send a message to all of South Africa we are in this together - it is not just government’s job to save the ratings.
“If you want to improve the investment climate, all of us need to talk positively about South Africa and work as one team. I think the president gave important leadership today,” he said, in reaction to the President’s State of the Nation Address.
President Zuma during his speech said that to further curb wastage, several public sector areas of spending, including post-budget vote gala dinners, amongst others, will no longer be held. He said the Finance Minister would announce further measures in this regard.
Ratings agencies, meanwhile, are expected to also use the Finance Minister’s budget to pronounce on the country’s fiscal stability going forward. Consumers will have their eyes glued to any proposed changes to the tax regime, from personal income tax to 'sin' taxes.
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