Former finance minister Pravin Gordhan. Picture: BUSINESS DAY
Former finance minister Pravin Gordhan. Picture: BUSINESS DAY

S&P Global Ratings said on Wednesday the cabinet reshuffle that saw former finance minister Pravin Gordhan and his deputy Mcebisi Jonas’s axing had hurt the relationship between business and government.

Speaking during a debate at Wits Business School on the effect of a credit rating downgrade, S&P South African sovereign analyst Gardner Rusike said there were strong green shoots under Gordhan.

"There was an element of government and business and labour which reduced the strikes seen in 2012 and had a relationship that could improve business confidence.

Gordhan, who was working with business and government, was replaced and this indicated there would be a 'dramatic change in policy'

"We believe that relationship has been hurt and to some extent, broken down."

He added that the three downgrades over the past five years showed that SA’s credit story had been deteriorating.

Econometrix MD Azar Jammine said investor confidence was more important than the rand or interest rates. Growth was low because investor confidence had declined, pulling down investment.

He said Gordhan, who was working with business and government, was replaced and this indicated there would be a "dramatic change in policy".

Jammine asked why it was necessary to replace Gordhan if new Finance Minister Malusi Gigaba had said there would be no change in fiscal policy.

Nedbank chief economist Dennis Dykes said ratings agencies were asking SA to do what it should have been doing all along: to implement the development plan it had in place.

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