Zuma: SA will maintain prudent fiscal path
In his first statement on the economy since sacking his finance minister, President Jacob Zuma on Friday said South Africa would not abandon its chosen, prudent fiscal course.
The remarks come as the rand continued to hasten along a downward path, two days after he replaced respected National Treasury chief Nhlanhla Nene with ANC backbencher David van Rooyen.
“His [Van Rooyen] appointment as minister of finance does not signal a change in the government’s fiscal stance. Government will not abandon the fiscal path that we have chosen in the last few years. Maintaining a prudent fiscal position remains one of government’s top priorities,” Zuma said.
“The new minister will strengthen the path and continue to support all efforts aimed at improving the lives of ordinary South Africans.”
“Minister Van Rooyen is supported by Deputy [Finance] Minister Mcebisi Jonas who carries many years of experience in the economic cluster. They are supported by the hard-working and capable National Treasury team, led by the director general Mr Lungisa Fuzile.
“Our commitment to diversifying our economy, reduce the cost of doing business, and utilising resources much more efficiently to enable a more inclusive economic growth remains important,” Zuma said.
To support the economy, government was committed to sustaining public sector capital investment, by attracting private sector capital into public infrastructure projects.
Government also remained committed to providing support to state-owned companies in a fiscally sustainable manner, including South African Airways.
“We assure the nation that nothing will be done, in supporting state-owned entities, that runs contrary to the fiscal prudence that our country is renowned for. No state-owned entity will dictate to government how it should be assisted.
“The implementation of the National Development Plan remains the cornerstone of our economy. We will continue our actions in alleviating the most binding constraints to growth and we have set out a series of urgent economic reforms to build a more competitive economy.”
Zuma said he had taken Nene out of Cabinet because he had been chosen as the country’s candidate for the post of head of the African regional centre of the New Development Bank.
“The urgency of the changes in the leadership of the National Treasury was occasioned by the need to send nominations to Shanghai, of the head of the African Regional Centre of the New Development Bank/BRICS [Brazil, Russia, India, China, South Africa] Bank, to be based in Johannesburg. Mr Nene is our candidate for this position.
“We are fully backing his candidature, knowing full well that he will excel and make the nation proud in his next assignment.”
He stressed that government was committed to respecting the spending ceiling Nene set in his last budget in February.
“Government remains committed to adhering to the set expenditure ceiling while maintaining a stable trajectory of our debt portfolio, as set out in the February 2015 budget.”
In a separate statement, the presidency rejected the “ongoing reports in some media houses about an alleged pending Cabinet reshuffle”.
“The reports also mention certain ministers. Misguided speculation of this nature is mischievous and misleading. We urge that Cabinet be afforded the necessary respect and space to work,” the presidency said.
Observers and opposition parties have suggested that Zuma’s reason for axing Nene was the minister’s reluctance to release funds for the country’s planned R1 trillion nuclear power build – seen as the president’s pet project – and his rejection of a bid by South African Airways to renegotiate a contract with Airbus.
ANA
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