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Sat May 27 11:54:37 SAST 2017

Diplomatic Gigaba appears to have assuaged foreign investors’ fears

Nathi Olifant And Bongani Mthethwa | 2017-05-07 15:55:49.0
South Africa's Finance Minister Malusi Gigaba speaks at the World Economic Forum on Africa 2017 meeting in Durban
South Africa's Finance Minister Malusi Gigaba. File photo.
Image by: ROGAN WARD / REUTERS

Last week was one to remember for finance Minister Malusi Gigaba‚ who seemingly became an overnight sensation with foreign investors - and even his predecessors - at the World Economic Forum on Africa‚ held in Durban.

So tremendous was his diplomacy of allaying of fears that even German finance minister Wolfgang Schäuble flew to Durban just for one day on Thursday to partake in the Gigaba-led "Strengthening G20 Partnership with Africa" plenary.

By all accounts‚ Gigaba appeared to have won the confidence of the wary global financial establishment by assuring investors not only on policy consistency and fiscal consolidation‚ but also with open engagements on the country's efforts to mitigate and manage the adverse effects of recent downgrades.

Whether by design or tactical strategy there was no word on the "draconian" radical socio-economic transformation from him on Friday. Fielding questions during a mini bilateral meeting with Tharman Shanmugaratnam‚ Singaporean deputy prime minster‚ on the sidelines of the WEF‚ Gigaba said the two countries were exploring prospects of strengthening trade and investment opportunities.

Singapore was identified as a model for economic growth that South African could imitate.

"The deputy prime minister informed us that Singapore has an embassy in SA and views SA as a important player on the African continent. And they have an important agency that encourages Singaporean investment to a country‚ Enterprised International based in Johannesburg‚" he said.

Gigaba said such agencies were there for South Africa to use to communicate the investment message for South Africa.

"We have been indicating that in terms of our policies there is going to be consistency. The budget as presented is going to be implemented as was presented. There isn't going to be any change in that budget. We are not going to spend above the budget line. We are committed to maintaining fiscal consolidation in ensuring that we increase our spending in line with growth in the economy and the revenue base and the money that comes to our coffers."

Gigaba said this was so as to provide the certainty required by foreign investors with regard to policy and fiscal policy.

Shanmugaratnam after having had a conversation with Gigaba said he was pleased to be given assurances that South Africa was friendly for business.

He said although it was early days‚ Gigaba was able to provide clarity and assurance.

"First I think the fundamentals for expanding trade and investment between SA is there. Frankly at the moment it's a very low level kind of trade‚ low level of investment relationship but the opportunities are tremendous. Having clarity about the investment climate is very important‚" he said.

Gigaba could also not conceal his optimism and excitement and basked in this glory when asked to summarise the forum.

"This was a very interesting forum in the sense that we had record numbers of attendance...and it's something that we appreciate. I appreciated the fact that as a new finance minister many people were keen to hear my voice‚ my policies‚ my articulation on various issues and I spent a lot of time in panel discussions with investors and fellow ministers. We had a tour with investors around Durban to show them‚" he said.

Gigaba stressed South Africa and Africa's position in the G20 saying he was hoping that when its chairmanship moves to Argentina from German next year there will not be any changes that will be detrimental to the African continent.

This is something he also discussed with Schäuble when he jetted into the country on Thursday.

"It was important for us during the G20 engagements to highlight the need for inclusive growth and the diversification of economy on the African continent and South Africa particularly. This is so that we move the economy of Africa towards manufacturing which is going to have many positive benefits for our economies and foreign exchange so that our economies do not rise and fall depending on the commodity prices. It was quite important for us to make those statements on a consistency basis so that investors understand that on a policy level this is what our country is driving‚" he said.

On the home front‚ Gigaba said he had met with his predecessors‚ Trevor Manual‚ Nhlanhla Nene and Pravin Gordhan and that they gave him good counsel.

"I have met all three of them both formally and informally. They have counselled me in some of the pitfalls and in some of the dos and don'ts of this responsibility... they have cautioned me on some of the pitfalls‚ the urgent matters‚ some of the things that we need to do and some that we still need to continue doing. So I think I have a good and cordial relationship with some of them‚" he said.

- TMG Digital/TimesLIVE

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