New broom Gigaba could sweep to the wrong door
State unable to spend itself out of trouble
The integrity of South Africa's fiscal policy will be at risk and with it the potential deterioration of the country's investment grade credit rating to junk status if changes by new finance minister Malusi Gigaba steer the Treasury in a new direction. On Friday South Africa is due to receive its first credit rating review since it managed to stave off downgrades from all three ratings agencies late last year. Under former finance minister Pravin Gordhan, the Treasury took a stringent approach to cutting costs, even empowering the office of the chief procurement officer to take a more rigorous approach to public spending. It also aimed to reduce debt of more than R2-trillion in an environment where tax revenues are at least R30-billion lower and economic growth below the potential of 1.4%. A senior official said this week the Treasury was at pains to communicate that the fiscus was following a "reasoned and balanced consolidation path" in the hope this would continue to build confid...
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