Ramaphosa ‘perfectly suited’ to address SA’s challenges, says IMF
Christine Lagarde confirmed that she has not been approached by the government to discuss any kind of financial support
President Cyril Ramaphosa has his eyes on the right objectives for the country and is very focused on what he wants to deliver, IMF head Christine Lagarde said on Wednesday.
Commenting on speculation that the country could approach the global lender for a bailout considering its precarious financial position, Lagarde said the IMF had not been approached for funding.
“Our focus is on governance and unleashing the potential of growth. We see [Ramaphosa] as perfectly suited, given the challenges ahead,” she said, citing the high levels of youth unemployment and the need to increase growth.
Lagarde is in the country as part of the IMF head’s annual African trip. She told journalists soon after meeting Ramaphosa in Pretoria on Wednesday that her organisation has faith in the president.
The vote of confidence is a significant boost for Ramaphosa who took over from former president Jacob Zuma early this year. His key tasks are to restore investor confidence, improve growth, and cleanse the government of corruption that increasingly grew during the Zuma presidency.
Lagarde said the private sector needs to be a driver for the increased investment into the economy. “Attacking these issues of corruption head on is only going to improve the state of the economy. There’s a lot to be done but we support the project of removing the state capture that has taken place,” she said.
She warned that the biggest risks to the economy were complacency and the gap between high expectations and the “inevitable slower delivery of change” given the vested interests. She added, however, that complacency is unlikely given the strength of institutions such as the National Treasury and the Reserve Bank.
In October, the IMF cut its growth projections for SA to 0.8% in 2018, down from its initial projection of 1.5% in April, after the economy plunged into recession for the first time since the global financial crisis.
In a statement released last month, the IMF said that while the government has ramped up efforts to improve governance, SA faces reform implementation headwinds.
“Some of the initial optimism has dissipated as growth remains stuck in low gear and reform implementation has faced constraints. This is, therefore, a critical time to implement stalled reforms to restore confidence, attract investment, support growth, and rebuild buffers to deal with a challenging environment.”