Johannesburg- Investors are still confident in South Africa as an investment destination, Finance Minister Pravin Gordhan said on Monday.
“The key message we’ve come back with is that the world is watching South Africa very carefully. Many of them (investors) have invested in South Africa for a long time in bonds and equities. They still have confidence in us as a leadership team, both within government and outside of government. We have the ability and resources…. to move to higher levels of growth and confidence in our own economy,” Minister Gordhan said.
The Minister was addressing the media following last week’s investor roadshows to the UK and the USA.
It was normal for National Treasury following the tabling of the National Budget to undertake such roadshows, he added.
The purpose of the roadshows - which was composed of a delegation of government, labour and business - was to engage with international investors after the tabling of the Budget and also to provide updates on the latest economic development in the country, as well as plans for the medium term.
The South African delegation met with investors that collectively manage several trillions of dollar assets.
“These are some of the investors we owe in excess of R600 billion,” he said.
The delegation held meetings with over 250 investors.
Among the issues raised by the investors included South Africa’s slow economic growth, issues relating to business and investment confidence and regulatory clarity, labour and monetary policy, as well as South Africa’s political environment.
Speaking at the briefing, held at the Johannesburg Stock Exchange (JSE), Minister Gordhan said the issues raised by investors underscored the need for South Africa to implement the growth inducing economic reforms with urgency.
“The world economic outlook is uncertain and it is crucial that the country be seen to be united and focused on tackling its socio-economic challenges. South Africa is expected to take ownership and speedily deal with domestic constraints to economic performance,” he explained.
The Minister reiterated that South Africa, while facing challenges, is a resilient country.
“The message that we gave is that we are a resilient country, that South Africans need to be aware that during the Moody’s visit on Wednesday, where they will be meeting various role-players in our society, asking some tough questions on where are we heading and if this government is demonstrating that it has a firm grip on the fiscus, will be some of the questions they will ask,” explained Minister Gordhan.
This comes as Moody’s Investor Service (Moody’s) announced last week that it has placed South Africa’s long and short term ratings of “Baa2” and “P-2”, respectively, on review for a possible downgrade.
The credit ratings agency will visit South Africa for its annual review from 16 - 18 March 2016.
In a statement last week, National Treasury said the review visit will primarily serve to either affirm the current ratings or downgrade them. Moody’s currently rates South Africa two notches above sub-investment grade for foreign currency debt.
Minister Gordhan said South Africa over the next few months needs to provide “very concrete evidence” that “we are not just talking, that we are not just delivering new plans and proposals.”
“It’s time for collective action, concrete action and demonstrative action which the world can say yes we believe these guys,” said the Minister.
He added that South Africa is not the “worst off “ country and that it can avoid a downgrade, adding that investors appreciated the fact that the South African delegation comprised of both labour and business.
The Banking Association’s Cas Coovadia said business was in talks with government about addressing red tape.
Reserve Bank Deputy Governor Daniel Mminele said investors raised questions about the regulator's policy dilemma of rising inflation amid low growth. –SAnews.gov.za
