South Africa must take tough decisions and send out a strong message about the leadership and economy of the country to avoid a downgrade, Finance Minister Pravin Gordhan said on Wednesday night.

"Is South Africa headed for a car crash? Well, we would be foolish not to avoid it if that is the case," he said.

Gordhan was speaking to faith leaders at the National Church Leaders' Consultation in Johannesburg. The talk was on active citizenship and ensuring that national resources are used for good.

Although he focused most of his address on how to develop a generation of citizens who were not dependent on the state, he also spoke to the guests about his impending midterm budget address, set to take place next week Wednesday.

The minister, who is facing a fraud charge over a 2010 sign off on an early pension for former South African Revenue of Service deputy commissioner Ivan Pillay, did not dwell on that particular issue or any of the other developments around him which have made news headlines.

However he said government, labour, business and civil society needed to find common ground once again for the sake of the country.

Stability, optimism

"We need to find unity of purpose, send out the right message like we did in the first six months of the year. There are some pluses on our side, let's use them wisely."

Gordhan stressed that it was important for South Africa to show that it had political and economic stability and for the country to exude optimism.

"All of us share the concern that we don't want ordinary citizens of South Africa or businesses or government negatively affected by the phenomenon."

Gordhan said a downgrade was not a technical exercise but a warning signalling that a country had gained a bad reputation as a debtor.

"You pay more for interest on money you borrow and that will affect the ordinary South African in all sorts of ways and we want to avoid that," said Gordhan.

The minister said what the country needed was cautious leadership as it steered its way through a challenging economic environment.