SA can avoid downgrade but business elites must come on board - Gordhan

Finance Minister Pravin Gordhan believes there is a better than 50% chance that South Africa could avoid a ratings downgrade‚ despite the pressures on the economy.

Speaking on Tuesday morning at the Business Day and Financial Mail Investment Summit‚ Gordhan was optimistic about the country's economic growth.

“We ourselves are not in recession territory. We have interesting small green shoots in different parts of the economy. If we nurture those shoots in the right kind of way and create the right kind of ecosystems‚ we can certainly get back to two and three percent growth in two or three years. I'm an optimistic by nature.

“All in all I think we have more going for us than against us. It's up to us as South Africans to ensure that we seize the opportunities that we have‚” he said.

Gordhan said that a partnership between the business sector and the labour department is pointing to areas of prospective growth‚ singling tourism‚ agriculture‚ infrastructure and aquaculture out.

In order for this growth to become a reality‚ Gordhan urged private sector elites to do their bit.

“Ask yourselves what kind of contribution you can actually make to building a solid alliance which creates confidence in the country and creates investment‚" he said to the gathering of business executives.

Gordhan said that the duty to ensure the benefits of economic growth were distributed to the poor fell on both government and business.

“Citizens are becoming impatient with elites‚ which includes all of us by the way. Normally you guys would say the politicians are the guys. I'm going to stand here and say you are also part of the elite.

“That impatience [citizens are feeling] is about saying that GDP numbers are in themselves not a reflection of how the benefits of GDP or growth [is] distributed in a society‚ particularly amongst‚ in our case‚ 55-million citizens.

“The one appeal I want to make to all of us is that we need to move away from an environment where some of us are very active‚ some of us are very involved both in labour and the private sector‚ but many of us are passive in this environment.

“We can make a contribution‚ notwithstanding all of the political noise‚ whatever noises that we have and debates‚ to create a positive narrative about our country.

“I'm hoping that at conferences like this‚ over and above looking at the numbers that you look at‚ and the scenarios that various speakers will be spelling out for you‚ you will also look at some of the national dynamics and what a well-endowed audience [such] as yourself will contribute to the problem of 30% unemployment‚ 40% unemployment amongst young people and make a dent in those numbers.

“We are moving into an era where the economic model is one which has to demonstrate that we are inclusive. We cannot continue with an economy where large numbers of people still sit on the periphery.”

Gordhan appealed to the media to engage audiences on the relevance and practicality of inclusivity for the economy. Inclusivity includes increasing access to the economy for the poor and encouraging entrepreneurs and small businesses‚ he said.

Gordhan also referred to the importance of institutions with appropriate expertise‚ skills‚ credibility and integrity to grow the economy and attract investment.

"Institutions do matter … Institutions outlive individuals‚" he said.