Gigaba knew about downgrade on Friday

Despite saying that a single individual could not bring down a country’s credit rating, Finance Minister Malusi Gigaba said he knew that S&P Global Ratings would downgrade SA’s sovereign outlook on Friday.

Following the shock of S&P’s credit-rating downgrade that left SA on junk status with a negative outlook, Gigaba addressed the media at the Treasury on Tuesday, following a briefing with former Finance Minister Pravin Gordhan.

"When I spoke on Saturday, I indicated that I had spoken to Moody’s and Fitch. S&P had already made the decision on Friday and there was nothing we could do to change that," said Gigaba.

"The reason I didn’t take you into my confidence is because they had taken me into their confidence. I had to afford them the courtesy of not divulging the information."

• Zuma speaks on reshuffle and economy‚ but remains mum on downgradeAlthough South Africa's economy is "critically" important to president Jacob Zuma‚ who was speaking in Pretoria on Tuesday‚ he made no mention of the country's economic downgrade. 

He said it was a matter of ethics.

"SA has R2.2-trillion in public debt. R20bn of this debt is paid in foreign currency," said Gigaba. Yesterday, S&P lowered this debt to below investment grade.

The downgrade was attributed to the recent executive changes that have put fiscal outcomes and the contingent liabilities to the state at risk, and the view that political risks would remain high.

•  What does junk status mean for you and your wallet?As South Africans absorb the fact that the country has been downgraded to junk status, we take a closer look at what this means for you and for the country.

"While the financial executive has changed, government’s policy remains the same," said Gigaba. "Our fiscal objectives remain unchanged."

He added that he was confident in SA’s current fiscal policy.

Gigaba said he was committed to showing business leaders, organised labour and ratings agencies the economic policies to be optimistic about. He did, however, add that government was committed to radically transforming the economy.

"We need to re-ignite the nation’s growth engine," said Gigaba.

He said: "A country becomes junk status when two out of three rating agencies downgrade you to that status."

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