Gigaba: 'I knew we were going to be downgraded'
'The reason I didn't take you into my confidence is because they had taken me into their confidence. I had to afford them the courtesy of not divulging the information'
In spite of saying that a single individual could not bring down a country's credit rating‚ finance minister Malusi Gigaba said he knew that S&p would downgrade SA'S sovereign outlook on Friday.
Following the shock of S&P's credit rating downgrade that left SA on junk status with a negative outlook‚ Gigaba addressed the media at National Treasury on Tuesday following a briefing with former Finance Minister Pravin Gordhan.
"When I spoke on Saturday I indicated that I had spoken to Moody’s and Fitch. S&P had already made the decision on Friday and there was nothing we could do to change that‚" said Gigaba.
"The reason I didn't take you into my confidence is because they had taken me into their confidence. I had to afford them the courtesy of not divulging the information."
He said it was a matter of ethics.
"South Africa has R2.2 trillion in public debt. R20 billion of this debt is paid in foreign currency‚" said Gigaba.
Yesterday‚ S&P lowered this debt to below investment grade.
The downgrade was attributed to the recent executive changes that have put at risk fiscal outcomes and the contingent liabilities to the state and the view that political risks will remain high
"While the financial executive has changed‚ government's policy remains the same‚" said Gigaba.
"Our fiscal objectives remain unchanged‚" he assured.
He added that he was confident in SA's current fiscal policy.
Gigaba said he was committed to showing business leaders‚ organised labour and rating agencies the economic policies to be optimistic about.
He did‚ however‚ add that government was committed to radically transforming the economy.
"We need to reignite the nation's growth engine‚" said Gigaba
- TMG Digital