PRETORIA - Finance Minister Malusi Gigaba says he’s confident South Africa’s economy is resilient and robust enough to bounce back to investment grade.
The minister spoke in Pretoria on Wednesday morning ahead of a trip to attend meetings of the International Monetary Fund and World Bank in the United States.
Gigaba says he'll be meeting with investors to provide assurances on South Africa’s economic stability.
“The changes in the national executive made on 30 March has left them concerned and we need to give that reassurance in terms of government policy. It was only changes to the national executive not government’s policy as we’ve been explaining over the last two weeks.”
The minister says he'll also meet with rating agency Moody’s.
“We’ll meet with them to give assurance in terms of government’s policy direction because we will have an opportunity. There are some who have not given us a downgrade but a 90-day review. That face to face discussion is to assure them of government’s policy direction.”
#Treasury Gigaba: I’ll be having meet-and-greet with German finance minister who heads up G20 - prog focused on African investment. BB— EWN Reporter (@ewnreporter) April 19, 2017
#Treasury Gigaba: purpose of the IMF and WB meetings are to discuss global economic trends and outlook and interact. BB— EWN Reporter (@ewnreporter) April 19, 2017
Fitch recently downgraded South Africa to junk status following Standard & Poor’s Global, who also downgraded the country to junk status.
WATCH: Gigaba: I knew credit rating downgrade was coming
Downgrades to junk from the two agencies could see South Africa drop out of some widely used global bond indexes and force international funds which track them or which are prohibited from holding sub-investment grade securities, to sell.
Fitch's move will almost certainly lead to a rise in government debt-servicing costs, which will mean less money for critical services such as housing, education and sanitation, which could incite even more protests over service delivery that have already rocked towns across the country.
(Edited by Shimoney Regter)