S/Africa heads for IMF meetings to woo investors, rating agencies

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Johannesburg – The South African Government is to head for Washington DC this weekend to meet rating agencies and international investors at an IMF meeting in a bid to boost economic growth.

The Treasury said in a statement in Johannesburg on Thursday that Finance Minister Malusi Gigaba and Central Bank Governor Lesetja Kganyago would lead the delegation.

“It is important that we continue to engage these stakeholders to discuss interventions on how they can support South Africa’s development process, and to demonstrate our commitment toward addressing their concerns,” the Treasury said.

It said that Gigaba would use IMF meeting and World Bank annual conference to convince investors and rating firms that the economy was on the mend.

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Moody‘s, Fitch and S&P Global Ratings downgraded the country’s sovereign credit rating following President Jacob Zuma’s abrupt axing of Pravin Gordhan as finance minister in March.

All three agencies have warned that persistently low growth at struggling state firms heavily reliant on government bailouts pose significant risks to the country’s ratings.

They are also concerned about political jostling ahead of a conference of the ruling African National Congress party in December to elect a new leader to replace Zuma.

The World Bank on Wednesday kept its 2017 economic growth forecast for South Africa at 0.6 per cent.

The bank said that the economy would expand below two per cent in 2018 and 2019, warning that the country needed to urgently rein in political uncertainty.

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On Tuesday, the IMF said that it expected South Africa’s economy to grow by 0.7 per cent this year, down from an earlier projection of 1 per cent given in July.

It attributed the low growth to rising political uncertainty, which has dented consumer and business confidence.

The leadership contest has spawned different rival factions and no clear frontrunner, raising political uncertainty that Zuma can remain as head of state until an election in 2019. ((Reuters/NAN)

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