The developed world should regard developing countries such as those in Africa as their partners and stop reacting rashly when the US Federal Reserve changes course, said Finance Minister Pravin Gordhan.
He spoke at a breakfast in Cape Town which was jointly hosted by eNCA and SABC, following the delivery of his Budget Speech in parliament on Wednesday. In response to a question from German Ambassador Walter Lindner about what his message to foreign investors should be, Gordhan said: “Africa is uncharted territory and South Africa specifically has the most sophisticated business infrastructure on the continent.
“Yes, there are problems with connectivity, but we want to discourage the developed world to cause so many ebbs and flows in emerging markets. Things keep changing and your capital inflow and outflow hurt developing countries.”
Cas Coovadia, managing director of the Banking Association of South Africa, asked Gordhan if he has the necessary support from the rest of government for the budget he proposed, especially where state-owned enterprises are concerned.
“Minister, it’s a tough environment in which you had to draft the budget and reaction from the business sector was very positive. But government also needs to get behind this budget and take the hard decisions to implement the plans.” He asked Gordhan if privatisation of State-owned enterprises (SOEs) is an option at all.
Gordhan did not answer the question directly, but said: “Privatisation has become a deadly word in South Africa, as there’s a view that state assets should be utilised for developmental purposes.
“In nominal terms that’s fine, but we find ourselves in an environment where we just don’t have enough money to give, say, R3-billion to SAA. That’s why we need to bring multiple brands (in SOEs) together and merge boards. We need to mobilise all the capital we can get. And apologies to those who make their money sitting on boards.”
'I'll be fired if I say anything about cabinet size'
Leanne Manas, SABC Morning Live presenter, asked Gordhan to respond to some viewers’ questions about the size of President Jacob Zuma’s cabinet and the burden it puts on the economy.
“The finance minister will be fired if he says anything about the size of the cabinet,” Gordhan quipped. “I can’t comment on that. Constitutionally that is the president’s prerogative. If you actually look at the numbers, it (the cabinet) doesn’t cost billions of rands. But having two houses (in Cape Town and Pretoria) does.”