Rumours of another Cabinet reshuffle contribute to political uncertainty and make it difficult for investors to invest in SA, Finance Minister Malusi Gigaba says.
Speaking at a post-budget breakfast in Cape Town on Thursday, Gigaba said: “As government, you don’t want those rumours at all.
“SA has been affected by own goals which have created policy uncertainty and political uncertainty.
“Such uncertainty contributes to the negative outlook ratings agencies have given us because they don’t know which direction the country is going to take.
“We would do well as a country, if we provided greater certainty to investors and rating agencies so we can give the economy time to recover.”
We can’t afford it, we have excess electricity. The budget can’t afford it and the country can’t afford it
After a “candid” medium-term budget policy statement that underwhelmed and sent the market into frenzy, Gigaba said someone had to do the tough job and carry the news to the nation.
“You’d like to be the bearer of good news. Anyone in this position would have liked to say the economy is growing, that we have a budget surplus and revenue buoyancy … the books are what they are.”
Despite criticism that he has kicked the can down the road, Gigaba said he would not wait till the ANC electoral conference to make decisions.
“Everyone knows the economy is in crisis, not on December 22 but right now. We need to take the decisions now, they will blame us if we do not take the tough decisions now.”
He said the government needed to increase the scale and pace of structural reforms, reduce the debt of state-owned entities (SOEs), improve their governance, and build confidence through a stimulus programme for manufacturing and tourism.
Eskom is by far the biggest risk we face as a country. We need to deal with Eskom very carefully
In terms of SOEs, Gigaba said: “Eskom is by far the biggest risk we face as a country. We need to deal with Eskom very carefully and improve governance as a matter of urgency.”
SAA should promote a trigger effect at Eskom and other SOEs, he said.
Speaking about a nuclear energy programme, he said there was no misalignment in this regard with the rest of Cabinet.
“Over the next five years, SA will not be able to afford nuclear energy because the economy is growing too slowly.
“We can’t afford it, we have excess electricity. The budget can’t afford it and the country can’t afford it.”
He said there would come a point where the economy was buoyant and growing very fast and energy would be inadequate, “then you need to go the nuclear” route.
But he emphasised that SA could not currently afford it.
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