Finance Minister Malusi Gigaba had been "quite effective" in conveying the message that the fiscal objectives of government have not changed, outgoing director-general of the Treasury Lungisa Fuzile, said in Parliament on Tuesday.
Fuzile was answering questions by members of the finance committee on the Treasury’s annual performance plan. He said Gigaba had been very clear in telling investors that nothing would change in the government’s fiscal stance unless a slowdown in economic growth required it.
Fuzile did not believe government guarantees to state-owned enterprises were "going to explode" any time soon, although they were of concern to credit ratings agencies.
The largest guarantee is the R350bn for Eskom to build Medupi and Kusile of which it has so far drawn down R210bn. The next biggest was the R38bn guarantee to the South African National Road Agency Limited (Sanral).
The guarantee to South African Airways (SAA) is about R20bn, of which R16.7bn has been drawn down so far. A new chief financial officer who had the confidence of lenders had been appointed and was doing good work, Fuzile said.
It would, however, take some time for SAA to be in a good position. This would require the government to inject substantial equity into the airline, which would reduce the need for further guarantees.
The Treasury was working on a recapitalisation of SAA, which would happen in 2017. The balance sheet of the airline was too heavily skewed towards debt and was inappropriate, Fuzile said.
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