South African finance minister, Pravin Gordhan, admits that the country is in an economic crisis.
Addressing a media briefing Wednesday morning, ahead of his budget speech, Gordhan assured the business sector and South Africans that he’ll do whatever he can to avoid the country’s economy being downgraded to ‘junk status’.
“We cannot run away from the fact that we are in a crisis. It helps to understand that we have serious challenges in South Africa,” says Gordhan.
In the budget speech, Gordhan proposed to cut expenditure, increase tax, but he purposely shied away from the privatisation of state-owned entities. He indicated that he will not tolerate bail outs that are associated with these entities.
“If you noticed in my speech, I purposefully do not talk about the P-word [privatisation of state-owned entities]. We can rather focus on minority equity participation and co-investments,” says Gordhan.
[Read S.A Finance Minister Pravin Gordhan's 2016 Budget Speech here:
The “new old guy” (as he calls himself) indicated that the controversial South African airline, SAA, will have a new board but he didn’t says whether the chairwoman of SAA, Dudu Myeni, who has been associated with the firing of a former finance minister, will be part of it.
Gordhan also confirmed that R3 billion that has been allocated to South African electricity supplier, Eskom, has already been approved. He says a further R2 billion should be approved by the end of March.
On whether he has political support in decisions he has taken thus far, Gordhan’s response was simple.
“If you see me sitting here in October then I do have political support, If you don’t see me sitting here in October, then I don’t have political support,” says Gordhan.