Gigaba commits to fiscal consolidation after downgrades

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File: South Africa's new Finance Minister Malusi Gigaba said on Monday he would pursue "tough and unpopular choices" to oversee economic growth.

JOHANNESBURG – South Africa's new Finance Minister Malusi Gigaba said on Wednesday Treasury is committed to fiscal consolidation plans outlined in the 2017 Budget after S&P and Fitch downgraded the country to sub-investment grade.

Speaking to local investors at the Development Bank of South Africa, Gigaba said the Treasury aims to stabilise the government's net debt over the next three years at 50 percent of gross domestic production (GDP).

 

 

READ: Who is Malusi Gigaba? Meet the new finance minister

Last week Fitch downgraded South Africa's foreign and local currency debt to speculative grade, while S&P Global Ratings cut the hard currency borrowing to "junk".

Both cited likely changes in economic policy after a cabinet reshuffle.