Business Leadership South Africa (BLSA) has sent a letter to the ANC’s top six asking for an honest and transparent meeting as well as to the presidency, Deputy Chairperson of Business Leadership South Africa, Bonang Mohale told CNBC Africa on Wednesday. Mohale was speaking to Bruce Whitfield on the MoneyMakers show.
The letter comes a day after rumours surfaced on the Guptas’ ANN7 website that President Jacob Zuma has informed the ANC&#8217;s top six of plans to remove the country’s Finance Minister Pravin Gordhan from his post. It also follows <a href="http://cnbc.africa/uncategorized/2017/03/27/rand-weakens-cabinet-reshuffle-reports-finmin-recalled-overseas-trip/">a directive from the Presidency on Monday to Gordhan to return to South Africa </a>whilst on an international investor engagement roadshow.
READ: 
<a class="l _HId" href="http://cnbc.africa/news/2017/02/27/replacing-gordhan-jonas/">This would be the cost of replacing SA&#8217;s finance minister, or his deputy 
</a><a id="MAA4AEgBUABgAWoFZW5femE" class="usg-AFQjCNHkuwce0RqSPtII2veSDHYiSj_M6w sig2-lBbp8d3LKiJMCDG6Y9l55Q did-d8acd041fdb95203 article" href="http://cnbc.africa/news/southern-africa/2017/03/28/south-africas-anc-leaders-approve-gordhans-removal-ann7/" target="_blank">“I&#8217;m here, I&#8217;m still finance minister” – SA FinMin Gordhan 
</a><a href="http://cnbc.africa/news/2017/03/29/expectations-gordhan-will-go-leave-south-african-markets-edge/">Expectations Gordhan will go leave South African markets on edge 
</a> 
Mohale also told CNBC Africa that BLSA has issued a statement saying it is not too late to save the country. The “formidable partnership between government, business, labour and civil society needs to be used as a force for good irrespective of agendas, irrespective of December 2017 and the 2019 elections. Our actions in the next few days will determine whether we become a winning nation or we become yet another failed African state. We are at the crucible, the turning point &#8211; in fact this is more than the tipping point, this is a question of life and death for the majority of South Africans&#8221;, he added.
Below Treasury sheds more light on what the roadshow was about: 
Finance Minister Pravin Gordhan, senior officials from the National Treasury and senior leaders of South African business held a series of scheduled meetings with rating agencies and investors in London on 27 March as part of official trips planned for the week. The trips are scheduled National Treasury’s annual domestic and international investor engagement roadshows broadly timed to follow immediately after the tabling of the Budget in February and the publication of the Medium Term Budget Policy Statement in October respectively.
The roadshow was scheduled to take place in two phases. The first phase was set to take place in London on 27 and 28 March. Minister Pravin Gordhan was leading the delegation, which also comprised of Mr Jabu Mabuza (of Business Leadership South Africa and Business Unity South Africa), Ms Nicky Newton-King (of the JSE). Mr George Sebulela from the Black Business Council could not make it due to logistical challenges.
As in the past international roadshow held late last year, leaders of the three labour union federations – COSATU, NACTU and FEDUSA &#8211; were also invited to attend. Due to logistical reasons, they did not make the first day of the meetings, but were told not to travel because the trip was subsequently cancelled. The Reserve Bank delegation which also traditionally joins the roadshows could not be part of it because of the planned Monetary Policy Committee meeting.
The second leg of the roadshow was intended to be in the United States, to be led by the Deputy Minister Mcebisi Jonas. However, this trip was subsequently cancelled before he travelled last night.
In London, Minister Gordhan and his delegation had five face-to-face meetings with sixty representatives from the following fund managers: BlackRock, T.Rowe, Aberdeen, Eaton Vance, Vanguard, Investec, Metlife and Apollona, and 28 investors in a combined lunch. They also met two rating agencies (Fitch and Moody’s), as well as a teleconference with Standard &amp; Poor.
The meetings are part of the normal course of business of the Treasury’s effort to keep both rating agencies and investors informed about fiscal and monetary policy developments, more specifically and about topical contemporary policy issues in SA.
The questions from both investors and rating agencies revolved around: 
1. Economic growth: Investors enquiring about the achievability or otherwise of growth forecasts and Government, business and other partners’ efforts towards achieving faster and more inclusive growth.
2. Fiscal Policy: While broadly commending the budget, investors wanted to know whether there was still scope to adjust both revenue and expenditure sides of the budget in the event that the fiscal targets are likely to be missed materially.
3. Politics: Investors expressed concerns about the political environment and the risk that it could divert attention from setting policies aimed at accelerating growth and creating more work opportunities. They were also curious about the processes leading to the policy conference of the governing party and the electoral conference in December.
This information is crucial for investors to commit the funds under their management by buying South African government bonds (by lending to the South African government) and form their opinions about SA’s credit worthiness and thus to pronounce on the country’s rating. The ratings in turn determine the cost at which SA will borrow the R730 billion it will need to meet its borrowing requirement for the next three years.
Government on a weekly basis needs to borrow more than R13 billion in the domestic market. Of government’s total borrowing requirement, USD6 billion needs to be raised in the international market over the next 3 years to partly meet government’s foreign commitments. This is money that will contribute towards the building of public infrastructure – roads, schools, health facilities, etc &#8211; to deliver better public services to the 55 million South Africans.
One of the clear benefits of the roadshows is that, SA is one of very few countries that do not have to meet investors before issuing an international bond. In other words, the South African government is able to raise amounts as high as USD3 billion within a matter of 3-5 hours. This has been the case for the last 5 year now. 
The meetings commenced at 10am and ended at 18h00 before the team headed for the airport to catch their flight back home.

S.A’s Business leaders have written to the ANC’s top six

South Africa&#8217;s currency and bonds weakened again on Wednesday as expectations rise that President Jacob Zuma will sack finance minister Pravin Gordhan following the funeral of anti-apartheid icon Ahmed Kathrada later in the day.
&#8220;Speculation is that the duo may be fired tomorrow evening, after Uncle Kathy&#8217;s funeral,&#8221; Zuma&#8217;s one-time protege Julius Malema said on his Twitter feed, referring to Gordhan and deputy finance minister Mcebisi Jonas.
Malema, the firebrand leader of the Economic Freedom Fighters (EFF) party, is also a former leader of the Youth League of Zuma&#8217;s ruling African National Congress (ANC).
The rand fell by 1 percent against the dollar in early trade. Local assets have been under pressure since Zuma ordered Gordhan on Monday to abandon an investor roadshow abroad and fly home, triggering speculation about his future. Zuma has not given a reason for the recall.
Gordhan is seen as an emblem of stability by many investors and his comment on returning to South Africa on Tuesday that he was still the finance minister helped trim the rand&#8217;s losses.
Zuma is expected to act at or after a cabinet meeting later on Wednesday, the start of which has been postponed to enable ministers to attend Kathrada&#8217;s funeral.
&#8220;The reshuffle is imminent,&#8221; Daniel Silke, a director at Political Futures Consultancy said. &#8220;I think it&#8217;s coming once the funeral is over, it&#8217;s just a matter of time.&#8221;
Kathrada, an anti-apartheid activist who was sentenced to life imprisonment alongside Nelson Mandela, was an open critic of Zuma and the president will not attend his funeral in compliance with the wishes of Kathrada&#8217;s family.
Njabulo Nzuza, the Secretary General of the ANC Youth League, called for cabinet changes.
&#8220;There should be no panic in the country, a cabinet reshuffle, which can only be done by the president, is part of normal government operations,&#8221; he said in a statement.
Talk Radio 702 said Gordhan&#8217;s dismissal had been discussed on Monday at talks between Zuma and the South African Communist Party, allies of the ANC.
Some pundits say Gordhan is being pressured by a faction allied to Zuma, which has criticised his plans to rein in government spending as the economy stagnates.
(Reporting by Olivia Kumwenda-Mtambo; Writing by James Macharia; Editing by Catherine Evans)

Expectations Gordhan will go leave South African markets on edge

South African Finance Minister Pravin Gordhan said &#8220;let&#8217;s wait and see&#8221; when asked about reports that President Jacob Zuma was set to remove him, as he arrived back from an investor roadshow in Britain on Zuma&#8217;s orders.
Gordhan told reporters shortly after landing at Johannesburg&#8217;s international airport that he was focused on restoring faith in Africa&#8217;s most industrialised economy and had met with about 50 investors while in London.
On Monday, Zuma recalled Gordhan from the roadshow, fuelling lingering speculation of a cabinet reshuffle. South African assets, including the rand, have fallen sharply since Gordhan was told to return to South Africa.
(Reporting by Nqobile Dludla and Olwethu Boso; Writing by Joe Brock; Editing by James Macharia)

“Let’s wait and see,” South Africa’s Gordhan says on sacking reports

Following a directive from the President Jacob Zuma, Finance Minister Pravin Gordhan and National Treasury Director General Lungisa Fuzile are preparing to return tonight from the UK and are expected to arrive in South Africa tomorrow morning, a Treasury statement revealed. The rand which was at a 2015 high this morning tumbled more than 2 per cent against the dollar to 12.75 following the news of the president&#8217;s directive.
<div id="attachment_113778" style="width: 310px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-113778" class="size-medium wp-image-113778" src="http://cnbc.africa/wp-content/uploads/2017/03/RANDn-300x182.jpg" alt="" width="300" height="182" />Graph: Reuters</div>
R<a href="https://www.dailymaverick.co.za/article/2017-03-27-news-alert-presidency-halts-gordhan-jonas-international-roadshow-both-instructed-to-return-to-sa-urgently/#.WNjXXG-GPIU">eports</a> suggest that President Jacob Zuma may reshuffle his cabinet including Gordhan. Zuma recalled Gordhan, his Deputy Mcebisi Jonas and Director-General Lungisa Fuzile from their overseas trip this morning. The three together with key National Treasury officials, business and labour were on a non-deal international investor roadshow. The delegation was due to spend two days in London (27 &#8211; 28 March), one day in Boston (29 March) and two days in New York (30-31 March). This follows extensive engagements by senior National Treasury officials with domestic investors following the tabling of the 2017 Budget.
According to Treasury, Mcebisi Jonas who was scheduled to undertake the United States leg of the trip will no longer be leaving tonight as planned in line with the President’s directive.
Business Leadership South Africa in a statement said the President’s announcement directive is &#8220;ill advised&#8221;.
Adding that &#8220;The Finance Ministry, alongside business and labour who are accompanying the National Treasury on this roadshow, have worked hard to maintain South Africa’s investment grade credit rating. The damage to investor sentiment to South Africa as a result of the President’s decision should not be underestimated. Coming in the middle of meetings where business and the National Treasury have been making the case for South Africa, this action has pulled the rug from under our feet, as demonstrated by the rand sharply reversing its strongest growth trend in two years. At a time when investors need stability, certainty, and evidence of progress, this action sends exactly the opposite message.
&#8220;Business calls for cool heads and sound leadership to prevail in the context of certain damage to the economy should decisions be made which cause institutional instability, and associated negative impact on asset prices as seen in the collapse of confidence, currency and equity prices following Nenegate in December 2015. The sovereign credit rating agencies have continuously communicated that institutional stability is one of the central pillars on which their investment grade rating for South Africa rests, and any undermining of such strength puts this rating and the cost of capital at risk.
&#8220;The consequences of uncertainty and a downgrade include diminishing the ability of our country to remain economically stable, finance its debt, and support the government spending on which so many South Africans depend&#8221;.
The body said it was calling on South Africa’s &#8220;political leadership to exercise the greatest due diligence and put the economic welfare of the country first&#8221;.
Zuma&#8217;s directive comes a day before the North Gauteng High Court is due to hear reasons for why a declaratory order should be issued as to whether Gordhan can order the country&#8217;s big-four banks to keep doing business with the politically-connected Gupta family, whose accounts were closed following alleged  suspicious transactions.
<img loading="lazy" decoding="async" class="alignnone size-medium wp-image-113617" src="http://cnbc.africa/wp-content/uploads/2017/03/RAND-300x212.jpg" alt="" width="300" height="212" />
<blockquote class="twitter-tweet" data-lang="en">
So <a href="https://twitter.com/hashtag/PravinGordhan?src=hash">#PravinGordhan</a> was recalled from the UK roadshow. He was supposed to fly to USA tonight. Instead, <a href="https://twitter.com/hashtag/Zuma?src=hash">#Zuma</a> said his trip is unauthorised.
— Pauli Van Wyk (@PaulivW) <a href="https://twitter.com/PaulivW/status/846294806414462978">March 27, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-lang="en">
However, <a href="https://twitter.com/hashtag/Treasury?src=hash">#Treasury</a> says they have written confirmation of roadshow being authorised by <a href="https://twitter.com/hashtag/Presidency?src=hash">#Presidency</a>. 
We&#8217;re in for a hectic ride. Buckle up.
— Pauli Van Wyk (@PaulivW) <a href="https://twitter.com/PaulivW/status/846295207666749440">March 27, 2017</a></blockquote>
http://cnbc.africa/news/southern-africa/2017/01/30/south-africas-gordhan-alleges-campaign-by-guptas-against-treasury/

Rand weakens on cabinet reshuffle reports, as S.A’s FinMin agrees to return from investor roadshow

The decision to give Brian Molefe a seat in the country’s parliament has led to widespread <a href="https://www.dailymaverick.co.za/article/2017-02-20-life-of-brian-mexican-standoff-looms-for-zuma-of-guptas-new-cabinet-deployee/">speculation</a> that he is being positioned for a cabinet post – either as finance minister or as deputy finance minister. While some commentators believe that President Jacob Zuma has his sights set on appointing Molefe as finance <a href="http://www.timeslive.co.za/politics/2017/02/17/Molefe-as-MP-seen-as-a-bid-to-oust-finance-minister-Gordhan">minister</a>, others <a href="http://www.huffingtonpost.co.za/2017/02/17/whats-the-real-plan-for-brian-molefe/">argue</a> that the real target is Deputy Minister Mcebisi Jonas. The deputy minister <a href="http://www.fin24.com/Economy/mcebisi-jonas-takes-on-ajay-gupta-over-saxonwold-meeting-20170217">blew the whistle</a> on an alleged bribery attempt by a member of the Gupta family which is at the centre of a political storm amid allegations that it has attempted to exert undo influence on Zuma.
READ: <a href="/news/southern-africa/2017/02/27/south-african-police-say-not-investigating-deputy-finance-minister-jonas/">S.African police say not investigating deputy FinMin Jonas﻿</a> 
Either way, there is no doubt that Molefe’s appointment to either position would cause substantial turmoil in the country’s financial system and cost South Africa billions of rand.
<h2>The cost of the rand taking a knock</h2>
South Africa would take a massive economic blow because its currency would depreciate dramatically. The rand <a href="http://www.xe.com/currencycharts/?from=USD&amp;to=ZAR">fell</a> through the floor the last time Zuma made a misbegotten attempt to <a href="https://theconversation.com/why-zumas-actions-point-to-shambolic-management-of-south-africas-economy-52174">install</a> one of his cronies at the helm of the National Treasury in December 2015.
This should worry South Africans. The country’s current account <a href="https://www.imf.org/external/pubs/ft/scr/2016/cr16218.pdf">deficit</a> in the third quarter of 2016 was 4.1%. This means that the sum of imports and external debt – borrowing from abroad – is larger than the sum of its exports and lending abroad. Mineral products, machinery and chemical products alone <a href="http://atlas.media.mit.edu/en/visualize/tree_map/hs92/import/zaf/all/show/2014/">constitute</a> more than 50% of South Africa’s imports. A weaker rand would make these more expensive since the country would have to pay more rand per dollar value. This means that prices for everything from consumer products to transportation would go up. South African firms, which often depend on intermediate inputs from abroad, would face a rise in the cost for their products and an erosion of their profits. As a consequence, fewer people would invest in the country.
A currency depreciation would affect investors in other ways too. A weaker rand would diminish their returns and they would therefore be more likely to look for investment opportunities elsewhere. Not only will they stop investing, they would also likely unwind their existing positions. This in turn would drain liquidity from the financial system, making banks less likely to provide new loans for businesses. The knock on effect would be lower growth and higher unemployment.
It is difficult to put a number on the impact of a sudden depreciation of the rand. But some simple back-of-the-envelope calculations can help. South Africa spends roughly US$10 billion more on imports than it gets from exports. This corresponds roughly to R130 billion per year. If the rand weakens from 13 to 14 Rand per US$1, the country would need another R10 billion to finance its trade imbalance.
South Africa has watched this movie before. Between November 2015 and January 2016 when Zuma installed the backbencher Des van Rooyen as finance minister the rand weakened from R14.4 to R16.9 per US$. This R2.5 increase per US$ corresponded to additional R25 billion cost to finance our trade deficit. On top of this <a href="http://www.biznews.com/undictated/2015/12/15/cost-to-sa-of-zuma-v-rooyen-gordhan-nene-r171bn/">private investors</a> are estimated to have lost R171 billion after finance minister Nhlanhla Nene <a href="http://ewn.co.za/2015/12/09/New-finance-minister-announced">was fired in 2015</a>.
<h2>Secondary effects</h2>
Removing either the finance minister or his deputy would also result in rating agencies downgrading the country’s investment rating to junk status.
Zuma has shown in the past that he has no clue about the impact of ratings on the country’s finances. Amidst threats of downgrade late last year Zuma was <a href="http://www.fin24.com/Economy/zuma-we-take-the-ratings-agencies-very-seriously-but-20161025">quoted</a> as saying:
<blockquote>
But although they’re important, their ratings don’t necessarily have an impact on the agreements and commissions South Africa have entered into with other countries.
</blockquote>
This simply is not true. A downgrade affects the interest rates on every new bond issuance. Every year some of our outstanding R2,000 billion <a href="/www.nationaldebtclocks.org/debtclock/southafrica">domestic</a> and R141 billion foreign denominated debt has to be <a href="http://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/7195/08Statistical%20tables%20%E2%80%93%20Public%20Finance.pdf">rolled over</a>. Debt services are already at roughly R150 billion per year – the second largest position in the country’s <a href="https://www.fanews.co.za/article/economy/43/budget-2016/1390/budget-2016-all-about-debt-stabilisation-and-a-social-compact/19856">budget</a>. A 5% increase in the country’s refinancing cost would already cost South Africa additional R7.5 billion every year. Money that is missing to finance social grants, healthcare, police or student bursaries.
The banking group Absa did some <a href="https://businesstech.co.za/news/finance/145453/fears-over-south-africa-junk-status-this-is-how-it-will-affect-you/">sample calculations</a> on how a ratings downgrade would affect the average South African. It concluded that every adult person would lose roughly R2,000 because a ratings downgrade would mean that the banks themselves would face higher refinancing costs. These would be passed on to their customers.
These numbers mirror a World Bank <a href="https://businesstech.co.za/news/finance/145453/fears-over-south-africa-junk-status-this-is-how-it-will-affect-you/">estimate</a> that a ratings downgrade in South Africa would result in a reduction of R1,000 per capita by the end of 2017.
The numbers paint a clear picture. Zuma’s last attack on the National Treasury cost South Africa <a href="http://www.biznews.com/undictated/2015/12/15/cost-to-sa-of-zuma-v-rooyen-gordhan-nene-r171bn/">billions</a>. Molefe’s appointment would be seen as another attack on the institution given that he was implicated by the former public protector Thuli Madonsela in her state capture <a href="http://mg.co.za/article/2016-11-02-breaking-read-the-full-state-capture-report/">report</a>. The effect of his appointment would be equally costly for the country.
South Africans should not allow this raid on the National Treasury to happen. The last time Zuma and his allies attempted to capture a well-functioning institution for their own personal gains the private sector gave them a hiding. The good news is that it is likely that markets will show a strong reaction this time, too. The question is whether ordinary South Africans realise the threat that a captured National Treasury would pose to their wallets and stand up before it is too late.
<a href="https://theconversation.com/profiles/co-pierre-georg-213509">Co-Pierre Georg</a>, Senior Lecturer, African Institute for Financial Markets and Risk Management, <a href="http://theconversation.com/institutions/university-of-cape-town-691">University of Cape Town</a>
This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/replacing-south-africas-finance-minister-or-his-deputy-would-carry-a-heavy-cost-73286">original article</a>.

This would be the cost of replacing S.A's finance minister, or his deputy

S.A's 2017 Budget Speech

South Africa’s Finance Minister Pravin Gordhan in a pre-Budget press conference on Wednesday warned that “it can take many years to build a solid institution but a short time to mess it up”. It does matter who the team is that leads an organisation, how their team works together and generates ideas, he said. Gordhan was responding to questions over whether it matters who leads Treasury for the 2017 Budget Review and Estimates of National Expenditure to be implemented.
Gordhan added that there are certain institutions that shouldn’t be messed with – they include Treasury and revenue collection.
Since Gordhan was reappointed finance minister in December 2015 rumours have been rife over whether he and his Deputy Mcebisi Jonas will retain their jobs as they allegedly are not swayed by the powerful and politically connected Gupta family.
Gordhan argued that treasuries whether in the public or private sector are indispensable to well-functioning organisations.
Jonas weighed in on the discussion saying that all the political noise has an impact on what Treasury does.
Lungisa Fuzile, Director-General of Treasury said he has been in his position for almost six years during which time he has served under four ministers, this he argues has affected morale. It takes time to build chemistry with ministers, when there is high turnover it damages morale, he revealed.﻿

It matters who leads S.A’s Treasury – FinMin Gordhan

The startling reality about South Africa is that wealth remains highly concentrated – 95% of it is in the hands of 10% of the population. The bottom 20% have benefited from social grants and better access to services, the top 20% from the rising demand for skills and pay increases while those in the middle have been left behind. Unless this is urgently dealt with South Africa is facing a severe crisis.
This was the main message of South Africa’s Finance Minister Pravin Gordhan’s 2017 Budget, which repeatedly highlighted the need for radical transformation aka inclusive growth.
Gordhan argued that perhaps “in the face of such intractable economic hardships and disparities” the time has come to supplement the country’s Constitutional Bill of Rights with a ‘Charter of Economic Rights’”.
Something needs to be done to lift the “Missing Middle” to prosperity, poor people need to be given the opportunity to assemble assets &#8211; the status quo cannot continue, he argued. We need to look at how do we grow the economy with a greater sense of urgency?
According to his Budget speech the charter would bind South Africans to an economy which:
- Provides access to decent and well remunerated jobs,
- Facilitates training and retraining of citizens in the face of technological change, and
- Creates a supportive environment for micro, small and medium businesses and cooperatives.﻿

Time for S.A to consider a “Charter of Economic Rights” – FinMin Gordhan

What you need to know about Budget 2017
South Africa’s Budget 2017 revealed that revenue has lagged behind the economy, leading to R30bn shortfall, to deal with this shortfall several tax changes have been proposed as highlighted below. It also painted an economy in dire need of economic growth. This is also mentioned in this Budget in a nutshell.
New taxes on the way
<ul>
<li>Revenue has lagged behind the economy, leading to R30bn shortfall</li>
<li>Total tax revenue for 2016/17 will be R1.14trn, up 7% on previous year</li>
<li>S.A’s tax proposals will raise an additional R28bn</li>
<li>A wealth tax will be introduced comprising a new top personal income tax rate of 45% for those with taxable incomes above R1.5mn. It is expected to bring in between R3bn-R5bn.</li>
<li>Dividend withholding tax rate to be increased from 15% to 20%</li>
<li>Treasury is looking at share repurchase schemes</li>
<li>Tax free threshold increased from R75 000 to R75 750</li>
<li>Personal tax changes are as follows:<img loading="lazy" decoding="async" src="/media/19338669/personal_tax_598x432.jpg" width="598" height="432" alt="Personal Tax"/>﻿</li>
</ul>
<ul>
<li>Fuel levy to increase 30c/litre and road accident fund levy &#8211; 9c/litre</li>
<li>Excise duties for alcohol and tobacco to increase between 6-10% </li>
<li>Relief will be provided in the affordable housing market</li>
<li>Annual allowance for tax free savings accounts increases from R30 000 to R33 000</li>
<li>Medical tax credit will be increased in line with inflation</li>
<li>Consultations ongoing on tax on sugary beverages </li>
<li>Proposed design of sugar tax has been revised to include both intrinsic and added sugars </li>
<li>Sugar tax will be implemented later this year once details are finalised and legislation passed</li>
<li>Proposed carbon tax &amp; implementation date will be considered in Parliament this year </li>
<li>S.A to sign a multilateral instrument this year</li>
<li>SARS received VDP disclosures totalling R3.8bn in foreign assets</li>
<li>Special VDP will be open until the end of August this year</li>
<li>Multinational companies will be required to file further information with SARS</li>
</ul>
The State of S.A
<ul>
<li>S.A’s income growth has been uneven</li>
<li>95% of S.A’s wealth is in the hands of 10% of the population</li>
<li>35% of the labour force are unemployed</li>
<li>Over half of all children in Grade 5 cannot read adequately in any language</li>
<li>A Charter of Economic Rights needs to be debated to deal with these glaring inequalities </li>
</ul>
The State of S.A’s economy
<ul>
<li>S.A’s growth has been too slow at 1% a yr in real per capita terms</li>
<li>S.A’s transformation will be built through economic participation, partnerships</li>
<li>R28bn to be raised in taxes</li>
<li>S.A’s budget deficit for 2017/18 will be 3.1% of GDP</li>
<li>S.A’s government debt will stabilise at about 48% of GDP over next 3yrs</li>
<li>Spending priorities: Education, health services &amp; municipal functions in rural areas IMF projects world economy to grow by 3.4% in 2017 &amp; 3.6% in 2018 Economic inclusion is being prioritised everywhere S.A’s GDP expected to increase from 0.5% last yr to 1.3% 2017 S.A growth to be spurred by commodity prices rebounding Plans are afoot to get S.A out of the present low growth trap</li>
<li>S.A is finalising legislation relating to mining development &amp; land redistribution</li>
<li>S.A is implementing transition from analogue to digital television</li>
<li>S.A is continuing its independent power producer programme</li>
</ul>
S.A’s 2017 Budget  Allocations:
<ul>
<li>R3.9 billion for small, medium and micro enterprises and cooperatives.</li>
<li>R4.2 billion for industrial infrastructure in special economic zones and industrial parks.</li>
<li>R1.9 billion for broadband implementation.</li>
<li>R3.9 billion for the Council for Scientific and Industrial Research.</li>
<li>An additional R494 million for tourism promotion.</li>
<li>An additional R266m to support the aquaculture sector and realise the goals of the Oceans Economy Phakisa Operation.</li>
<li>Spending on agriculture, rural development and land reform amounting to nearly</li>
<li>R30 billion by 2019/20.</li>
<li>Provincial Roads Maintenance Grant is allocated R10.8 billion in 2017/18</li>
<li>SANRAL receives R15.4 billion over the period</li>
<li>The Department of Telecommunications and Postal Services receives R1.9 billion</li>
<li>The Passenger Rail Agency of South Africa to receive R16.7 billion</li>
<li>Public Transport Network Grant receives R6.2 billion in 2017/18.</li>
<li>R600 million over the medium term is reprioritised to the Social Housing</li>
<li>R18.4 billion over the medium term is allocated to the Regional Bulk Infrastructure Grant</li>
<li>R12.5 billion to the Water Services Infrastructure Grant</li>
<li>R1 billion is added to the local government equitable share in 2018/19</li>
<li>An additional R5bn to the R32bn previously announced has been allocated to higher education</li>
</ul>
The shape of S.A’s finances
<ul>
<li>The proposed expenditure for 2017/18 totals R1.56 trillion</li>
<li>Interest on debt amounts to R169 billion</li>
<li>Projected revenues amount to R1.41 trillion</li>
<li>The balance of R149 billion, or 3.1% of GDP, will be borrowed</li>
<li>S.A’s government debt stands at R2.2 trillion, or 50.7% of GDP</li>
<li>Funds available after providing for debt service costs &amp; contingency reserve up 6.9% to R1.24trn next year; are projected to rise to R1.43 trillion in 2019/20</li>
</ul>
Over the next three years:
<ul>
<li>47.5% of available funds will be allocated to national government</li>
<li>43.4% to provinces and</li>
<li>9.1% to local government</li>
</ul>
Public service wage bill
<ul>
<li>Provincial spending on personnel has declined to just under 60% in 2016/17</li>
</ul>
Social grants
<ul>
<li>Three new conditional grants will take effect in 2017/18</li>
<li>National Treasury &amp; provincial treasuries to focus on four “game changers”</li>
<li>Social assistance grants to be increased in April</li>
</ul>
S.A’s social grant allocations:
<ul>
<li>The old age grant will increase by R90 to R1600 for pensioners over the age of 60, and R1620 for those over 75.</li>
<li>The disability and care dependency grants also increase by R90 to R1600 a month.</li>
<li>Foster care grants increase by R30 to R920 a month.</li>
<li>The child support grant increases by R20 to R380 a month</li>
</ul>
NHI
<ul>
<li>Eleven NHI pilots have yielded valuable insights, on which to build</li>
<li>NHI Fund will be established</li>
</ul>
Education
<ul>
<li>Spending on basic education next year will be over R240bn</li>
<li>The Heher Commission of Inquiry into Higher Education will complete work by June</li>
</ul>
Procurement
<ul>
<li>Public procurement will amount to about R1.5trn over next 3yrs</li>
<li>Further procurement reforms to be introduced this year</li>
<li>Draft Public Procurement Bill to be published shortly</li>
</ul>
Forex collusion among banks
<ul>
<li>Market conduct regulator proposed</li>
<li>Banks need tougher rules to cover financial market abuses</li>
<li>SARB &amp; Treasury have initiated work on a more comprehensive Financial Markets Review Financial Sector Summit to take place in 2017 ﻿</li>
</ul>

Budget highlights 2017: How it affects you

All South Africans, especially the wealthy, had best tighten their belts.
“Slow economic growth has held us back and so decisive steps are needed to strengthen confidence, investment and growth.”
This was one of the key messages on tax given by Pravin Gordhan, Minister of Finance, during his 2017 Budget Speech in Parliament, in Cape Town today.
This year’s budget has to tackle a pesky problem &#8211; economic growth has shown ‘green roots’, with a 1,3% estimated growth in 2017, but it is not sufficient to address unemployment and poverty. 
“Government debt now stands at R2, 2 trillion, or 50.7% of GDP, interest payments are a rising share of expenditure. By acting now to stabilize debt we will ensure that future generations will not pay for today’s expenses, 20 or 30 years from now.”
It means Gordhan needed to raise R28 billion as well as reduce expenditure by R10 billion over the next year to ensure a sustainable recovery.  The concern of those in the streets was how government intended to raise it.
Those who will be hardest hit are the wealthy. People earning more than R1, 5million will now pay 45% personal tax. There will also be a 5% increase in dividends paid out to owners of companies to 20%, up from 15%.
“Wealth remains highly concentrated – 95% of wealth is in the hands of 10% of the population.” 
South Africans driving fuel guzzler vehicles will also be digging deeper into their wallets. Petrol will rise by 30c/liter under the general fuel levy, as well as an increase of 9c/liter will go towards the road accidents fund.    
Sin taxes, like alcohol and tobacco, also took a hit with increases of between 6% and 10%.
Two new levies will also be rolled out once they have been finalized in Parliament. A levy on sugary beverages will charge 2.1c per gram of sugar content above 4g per 100ml. While a proposed carbon tax, is still undergoing consideration.  
There is some relief. Medical tax credit rose with inflation. For the low income earner the tax free threshold was raised from R75,000 to R75,750. Those looking to invest their money in tax free savings accounts now have an annual allowance of R33,000, with no increase to their limits,  and the affordable housing threshold above which transfer duty is paid was moved from R750,000 to R900,000.
“For many years we have enjoyed the benefit of tax revenue collections outstripping economic growth. This contributed to expand public service delivery. This year, revenue has lagged behind the economy, leading to a R30 billion shortfall” says Gordhan.
The government has a tough budgetary juggling task ahead of them. High on their agenda is bailing out state owned enterprise South African Airways and the post office.  Financial management of Provinces have also undergone reviews, to eliminate ‘duplication of activities’; reduce spending on non-core goods and non-essential services.
“Though the fiscal envelope is constrained, billions of rands have been shifted to meet new needs. A substantial additional allocation to higher education is again proposed, adding R5 billion to the R32 billion previously announced.”
Government plans to clamp down on tax avoidance. This year government intends to sign a multilateral instrument to reduce the scope of aggressive tax avoidance activities. This includes automatic exchange of information between tax authorities and requiring multinational companies file detailed information with SARS on cross border activities.
“We rely on global cooperation to address trade imbalances, the abuse of tax havens and the coordination of financial stabilization efforts.”  
Gordhan says that SARS received disclosures of R3,8 billion in foreign assets, which will yield about R600 million, under the Special Voluntary Disclosure Programme which ends in August.
“Across all three spheres of government, and in state owned companies and public entities, those responsible for deciding how money is spent have to do so with scrupulous rigor and care. It is only right that is households and firms face tough choices in balancing their income and expenses; the same disciplines must be applied in public expenditure,” says Gordhan.
“…we face immense transformation challenges – we must overcome the inequalities and divisions of our societies. All South Africans must share in a more prosperous future.”
Tough times ahead for state and citizen alike.  ﻿

A R28-billion taxing problem

In his 2017 Budget speech, South Africa’s Finance Minister, Pravin Gordhan, highlighted the importance of reforming troubled State Owned Companies (SOCs) in the restructuring and strengthening of the country’s economy.
In recent times, many of South Africa’s SOCs have been struggling financial, often turning to National Treasury for billions in bailouts.
Speaking in parliament on Wednesday, Gordhan stated that the country’s Cabinet has endorsed a series of measures to reinforce governance and accountability in these SOCs.
“This imposes substantial obligations and responsibilities on boards and senior managers. We expect the highest standards of ethical leadership and understanding,” says Gordhan.
The Finance Minister says he met with members of the board of South African Airways, which has been on the spotlight in recent times for their alleged mismanagement of finances.
In a media briefing hours before Gordhan tabled the budget to parliament, he told journalist in attendance that the South African Airways chairperson, Dudu Myeni, couldn’t avail herself for the meeting.
“I met some board members nonetheless and I am positive about the turnaround strategy of SAA. They are now in the process of finding a suitable CEO and CFO for the company,” says Gordhan.
The director General of National Treasury stated that both the Post Office and SAA needed “substantial” capital injections which will have to be paid out in installments over a certain period. He further stated that the amount will be determined by October when the minister tables the mid-term budget.
In his budget speech, Gordhan stated that with a combined asset base of R1.2 trillion, the SOC’s are well-placed to partner with private sector investors in growing the productive capacity and infrastructure of South Africa.
“But they must be financially strong, governance must be sound, and boards and executives must have the necessary competencies to run complex business enterprises,” says Gordhan.﻿

S.A’s Finance Minister emphasises the importance of reforming troubled SOCs

Finance Minister Pravin Gordhan asks that reckless culture that led to the financial crisis must be prevented﻿.
South Africa’s National Treasury has proposed a dedicated market conduct regulator to deal with the abuses of banks.
In a press conference hosted by Treasury on Wednesday, South Africa’s Finance Minister said the 17 banks which have been referred to the Competition Tribunal for colluding in forex price fixing must be dealt with. Financial institutions must act responsibly to prevent the reckless culture that led to the financial crisis, he urged.
In his Budget speech he said the Competition Commission investigation into the banks, which led it to refer them to the Tribunal, is evidence “of a collusive culture at trading desks in banks. It is precisely to deal with such abuses that we have proposed a dedicated market conduct regulator, and we hope Parliament will pass this Bill as soon as possible”.
His speech also revealed that the Reserve Bank and National Treasury have initiated work on a more comprehensive Financial Markets Review under the leadership of former Deputy Governor James Cross.﻿

Market conduct regulator being considered for S.A’s banks

The relationship between labour and capital, rich and poor, black and white, still reflect the entrenched legacy of colonialism.
This was the word from South Africa’s Finance Minister, Pravin Gordhan, as he tabled the 2017 budget in parliament, Cape Town. A large portion of Gordhan’s speech addressed the lack of transformation in South Africa.
“Wealth is produced and allocated along the lines that remain fundamentally unjust. The ownership of assets and the distribution of income is captured by a minority of the population, a situation that is morally wrong and economically unsustainable,” says Gordhan.
The lack of transformation in South Africa has been a thorn on the side of the country for the last 23 democratic years with almost all the country’s industries still owned by a minority of the population.
The Finance Minister highlighted the importance of bridging the inequality gap in South Africa. He went on to agree with President Jacob Zuma on finding a new perspective for economic transformation.
“The litmus test for our programmes must be what they do to create jobs, eliminate poverty and narrow the inequality gap. Transformation must be mass-based, benefitting the most disadvantaged South Africans through the creation of new assets, capabilities and opportunities to build livelihoods,” says Gordhan.
Gordhan acknowledged the need to mobilize both private and public investment in social and economic infrastructure, new technologies and new activities that help build a modern and diversified economy.
“Our growth challenge is intertwined with our transformation imperative. We need to transform in order to grow, we need to grow in order to trandsform. Without transformation, growth will reinforce inequality and without growth, transformation will be distorted by patronage.” ﻿

S.A’s lack of transformation is morally wrong and economically unsustainable-Fin Min

In his 2017 budget estimate of national expenditure, South Africa’s Finance Minister, Pravin Gordhan, allocated the following to prioritise both national and provincial economic infrastructure:
&#8211;          The Provincial Road Maintenance Grant is allocated R10.8 billion in 2017/18, taking into account the increase in road traffic volumes.
&#8211;          SANRAL receives R15.4 billion over the period ahead for strengthening and maintenance of the national road network, which now stands at 21 946 kilometers.
&#8211;          The Department of Telecommunications and Postal Services receives R1.9 billion over the medium term to invest in high-speed internet connections in public buildings and schools in eight NHI pilot districts.
&#8211;          The Passenger Rail Agency of South Africa continues to implement its modernization and rolling stock renewal programme. Over the medium term, R16.7 billion is allocated for 70 new train-sets for Metrorail.
&#8211;          The development and operation of integrated public transport network, funded through the Public Transport Network Grant receives R6.2 billion in 2017/18.
&#8211;          To support higher density housing, subsidies for social housing have been rationalized and R600 million over the medium term is reprioritized to Social Housing Regulatory Authority for investment in rental housing units.﻿

R51.6 billion to fund national and provincial economic infrastructure requirements; S.A Treasury

The South African economy is expected to grow by 1.3 per cent in 2017 and 2 per cent in 2018 as economic conditions strengthen.
This is the estimate from South Africa’s Finance Minister, Pravin Gordhan, as he tabled the country’s budget for 2017 in parliament Wednesday afternoon.
South Africa’s economy grew by an estimated 0.5 per cent in the previous year.
Factors supporting the projected 1.3 per cent growth include marginally higher global growth, stabilizing commodity prices, greater reliability of the electricity network, favourable weather conditions, recovering business and consumer confidence, and improved labour relations says the minister.
“But the projected rate of growth is not sufficient to reduce unemployment or impact significantly on poverty and inequality. It falls well short of our NDP goals,” says Gordhan.
The Finance Minister went on to highlight the following imperatives needed to boost investment in the short term:
&#8211;          Finalising legislation relating to mining development and land redistribution.
&#8211;          Implementing the transition from analogue to digital television, which will release spectrum for broadband services.
&#8211;          Continuing the independent power producer programme, both in renewable and to take advantage of gas investment opportunities.
&#8211;          Further strengthening of economic regulatory functions and streamlining investment approval processes.
&#8211;          Production-friendly industrial relations and prompt resolution of disputes.
&#8211;          An enabling environment for small enterprises and support through leveraging both public and private sector procurement budgets.
&#8211;          Focused support on labour-intensive sectors =, including agriculture, agro-processing and tourism-related services.
&#8211;          Strengthening regional ties and trade links.
&#8211;          Safeguarding South Africa’s investment-grade credit rating.
Minister Gordhan further added that Treasury knows what to do to get out of the present low growth trap.
“If lions work as a team they will bring down even a buffalo.”﻿

A steady 1.3%  GDP growth projected for S.A, but still not sufficient says Finance Minister

South African Finance Minister Pravin Gordhan said on Monday he sees a &#8220;difficult political year&#8221; for the ruling African National Congress (ANC) but that he saw &#8220;green shoots&#8221; of growth in an economy that is barely growing.
The ANC has a major policy conference at the end of June and late this year will pick a new party leader to replace President Jacob Zuma as its candidate when his second term ends in 2019.
In an interview with the eNCA TV news channel before the unveiling of his annual budget on Wednesday, Gordhan said: &#8220;We seem to be improving slightly on the growth side, seeing some green shoots which we will describe for you on Wednesday.&#8221;
&#8220;At the same time we have our challenges,&#8221; he said, including: &#8220;A difficult political year for the ruling party which will create its own dynamics.&#8221;
Asked about fraud charges that were brought against him last year and then dropped, Gordhan said: &#8220;That kind of abuse is totally unacceptable in our kind of young democracy.&#8221;
That saga unsettled markets and led to speculation that Zuma and his allies wanted to remove Gordhan, who commands huge respect among investors.
Ratings agency Standard &amp; Poor&#8217;s said last month that ANC infighting could derail government efforts to improve policy implementation and that Pretoria had little room to boost spending. South Africa risks having its debt downgraded to junk status.
There has been widespread media speculation that Zuma, who has called for &#8220;a new chapter of radical socio-economic transformation&#8221;, still wants to replace Gordhan.
The political noise comes against the backdrop of a tough economic situation.
In his October mid-term budget statement to parliament, Gordhan cut the 2016 economic expansion forecast to 0.5 percent from the 0.9 percent previously predicted by the Treasury, but said GDP growth would recover to 1.3 percent next year.
 
(Reporting by Ed Stoddard; Editing by Louise Ireland)﻿

S.Africa's FinMin Gordhan sees difficult political year for ruling party

Whether you’re concerned about your taxes going up, education or infrastructure funding, #Budget2017 will have something for you. Pan-African business and financial news leader CNBC Africa in partnership with Discovery Invest will break from regular programming to bring you live coverage and analysis of South Africa’s Budget on Wednesday, February 22nd 2017.
South Africa’s Finance Minister, Pravin Gordhan’s speech will be one of his toughest yet.
He is expected to touch on: the economy; how government, civil society, unions and business can work synergistically and harmoniously together; education; taxes; and inclusive growth.
Tune into CNBC Africa, DStv channel 410 from 13h30 CAT on 22 February. Alternatively, livestream via CNBC Africa’s YouTube channel <a href="https://www.youtube.com/watch?v=ThndtDo7WFA">https://www.youtube.com/watch?v=ThndtDo7WFA</a> or website <a href="/tv/cnbc-africa-live/">/tv/cnbc-africa-live/</a>
On the day CNBC Africa will bring you the following programming line-up:
13:30 – 14:00      Pre-Budget Analysis 14:00 – 15:30      Live Budget Speech 15:30 – 16:30      Post-Budget Analysis 16:30 – 17:00      Tax Professionals’ Analysis of Budget 17:00 – 17:30      CEOs’ Analysis of Budget          17:30 – 18:00      Savings and Retirement Panel Discussion 18:00 – 18:30      Market Analysis of Budget 18:30 – 19:00      Socio-Political Analysis of Budget 19:00 – 19:30      Youth’s reaction to Budget  19:30 – 20:00      Highlights Special
Follow the conversation on Twitter@CNBCAfricausing the hashtags#DiscoveryInvestand#Budget2017
-ENDS-
For further media information, contact:
Monique Vanek
CNBC Africa’s News Editor
+27 11 384 0300
<a href="mailto:Monique.Vanek@abn360.com">Monique.Vanek@abn360.com</a>
Twitter: @CNBCAfrica﻿

Pravin Gordhan

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S.A's 2017 Budget Speech

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Budget highlights 2017: How it affects you

A R28-billion taxing problem

S.A’s Finance Minister emphasises the importance of reforming troubled SOCs

Market conduct regulator being considered for S.A’s banks

S.A’s lack of transformation is morally wrong and economically unsustainable-Fin Min

R51.6 billion to fund national and provincial economic infrastructure requirements; S.A Treasury

A steady 1.3% GDP growth projected for S.A, but still not sufficient says Finance Minister

S.Africa's FinMin Gordhan sees difficult political year for ruling party

CNBC Africa Brings you South Africa’s Budget 2017

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Advertise With Us

Pravin Gordhan

S.A’s Business leaders have written to the ANC’s top six

Expectations Gordhan will go leave South African markets on edge

“Let’s wait and see,” South Africa’s Gordhan says on sacking reports

Rand weakens on cabinet reshuffle reports, as S.A’s FinMin agrees to return from investor roadshow

This would be the cost of replacing S.A's finance minister, or his deputy

S.A's 2017 Budget Speech

It matters who leads S.A’s Treasury – FinMin Gordhan

Time for S.A to consider a “Charter of Economic Rights” – FinMin Gordhan

Budget highlights 2017: How it affects you

A R28-billion taxing problem

S.A’s Finance Minister emphasises the importance of reforming troubled SOCs

Market conduct regulator being considered for S.A’s banks

S.A’s lack of transformation is morally wrong and economically unsustainable-Fin Min

R51.6 billion to fund national and provincial economic infrastructure requirements; S.A Treasury

A steady 1.3% GDP growth projected for S.A, but still not sufficient says Finance Minister

S.Africa's FinMin Gordhan sees difficult political year for ruling party

CNBC Africa Brings you South Africa’s Budget 2017

News Tips

Advertise With Us

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