A seemingly frustrated Finance Minister Tito Mboweni has appealed for the implementation of “deep structural economic reforms” to avert a downgrade of South Africa to junk status.
In a series of tweets late on Thursday night, Mboweni appeared to respond to news that the World Bank had cut back on its forecast for South Africa’s 2020 economic growth to just 09.%.
He wrote, “If you cannot effect deep structural economic reforms, then game over! Stay as you are and you are downgraded to junk status!! The consequences are dire. Your choice. Yep!! Askies!!”
‘Reform inertia is frustrating’
In several other tweets, Mboweni added, “You were warned and chose to ignore the wise warnings!! Good luck!!
“Structural Economic Reforms inertia is frustrating. Let’s get on with it. Movement!! Many steps at a time!!
“What are critical Economic Strategic Reforms? Read the National Treasury now Government Document! Let us move forward! Many steps at the same time!! Movement!! No time for procrastinating!!”
Mboweni released the National Treasury’s proposed economic recovery strategy paper in August 2019 and invited public comment.
The plan aims at creating 1 million jobs and rebooting the economy to achieve growth rates of 2-3% in the immediate future.
It proposes other measures such as implementing a flexible industrial policy and promoting export competition.
However, it triggered strong opposition from the African National Congress (ANC) alliance partners Cosatu and the South African Communist Party (SACP), who slammed it as “right wing.”
Economic Freedom Fighters (EFF) also dismissed it as a “declaration of war on the working class,” although the Democratic Alliance (DA) broadly welcomed the plan.
The ANC alliance reportedly shelved the plan at its recent meeting late last year and resolved to come up with a “unifying” strategy.
Moody’s is the only ratings agency that still places South Africa above investment grade, albeit with a negative outlook.
The World Bank’s latest assessment, which cited ongoing load shedding as the biggest reason for its lower forecast, could lead to a downgrade from Moody’s.