SA must preserve credit rating: Dep Minister Jonas
South Africa must preserve its sovereign credit rating, says Deputy Finance Minister Mcebisi Jonas.
“The first and important task of this collective leadership is to unite to preserve our sovereign credit rating. We have no choice but to remain optimistic,” said the Deputy Minister on Tuesday.
Rating agency Moody’s will arrive in South Africa next week to review the country’s credit rating.
Speaking at the 2016 Association of Black Securities and Investment Professionals (ABSIP) Financial Service Conference in Johannesburg, the Deputy Minister said South Africa needs to build a faster growing and more inclusive economy.
Deputy Minister Jonas said South Africa must continue to build on its strengths to realise its economic objectives.
“We have strong institutions and a robust legal framework. We have well developed and deep capital markets. Our share of gross domestic product (GDP) spending on infrastructure exceeds that of most other economies.
“We still have a good environment for business compared to many of our peers and we are witnessing a renewed vigour from government, business and civil society for economic reforms,” said the Deputy Minister.
He said the country should be obsessed with renewed growth and vigorous industrialisation, based on reducing growth constraints and fostering new technological capabilities that will grow employment, incomes and exports.
The country should also focus on education and skills development.
“Exceptional leadership within government, business, labour and civil society will be necessary to remobilise society as a whole behind this national project, and to extract the kind of concessions and compromises necessary. New institutional mechanisms for collective socio-economic governance and accountability will have to be developed as a matter of urgency,” he said.
Deputy Minister Jonas said urgent action needs to be taken among relevant ministries and state-owned entities to remove constraints to growth.
“Already many of these actions have commenced, including reducing high cross-border costs (including port tariffs), addressing electricity supply issues, as well as addressing regulatory bottlenecks and labour market constraints, especially labour unrests.
“We are alleviating infrastructure constraints and bottle necks through allocating R865 billion over the medium term expenditure framework (MTEF) to improve infrastructure.”
He said government is working with municipalities to improve the ease of doing business, and the country has established a one–stop shop, Invest SA, to coordinate investment promotion, facilitation and aftercare at a national level.
Invest SA will also ease delays for investors in obtaining visas, licences, permits, registration and approvals.
“We must address barriers to entry and deliberately enable increased black ownership of the economy. But this must be done through enhancing productivity and competitiveness, so that as we address anti-competitive behaviour among cartels, we do not negatively affect output, jobs and exports,” said Deputy Minister Jonas.
A key initiatives being driven to enable black ownership includes using the Public Investment Corporation to inject R70 billion into agriculture, mining, manufacturing, infrastructure and energy.
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