South African President Jacob Zuma will meet with some of the country’s top business leaders about the economy before his state of the nation speech, less than two weeks after the finance minister discussed ways to avert a credit-rating downgrade with company executives.
The meeting in Cape Town on Feb. 9 will take place in the wake of the World Economic Forum in Davos, the Presidency said on Thursday. “It was agreed that there should be a follow-up meeting in South Africa to reflect on the WEF meeting and lessons learned for the South African economy during the current negative economic climate and slow growth,” it said by e-mail.
Business leaders will be seeking an honest appraisal about the current economic situation and ways to create political credibility around growth, a person familiar with the matter said, who asked not to be identified because the information isn’t public.
South Africa is seeking to avoid a credit-rating downgrade to junk in the face of plunging commodity prices, weak demand from China and the worst drought in more than a century. While a slowing economy has prompted the government to put a cap on spending growth, it has so far avoided cuts. Finance Minister Pravin Gordhan met with about 60 top business leaders for 2 1/2 hours on Jan. 29 to discuss steps to boost investor sentiment and avert a rating downgrade.
Zuma shocked investors in December when he fired Nhlanhla Nene as finance minister and replaced him with a little-known lawmaker, sending the rand and bonds plunging. He then reappointed Gordhan, Nene’s predecessor, four days later after meeting with business people and leaders of his ruling African National Congress.
Zuma gives his annual state of the nation speech on Feb. 11 and Gordhan will present the budget two weeks later. The World Bank cut its forecast for economic growth this year to 0.8 percent, which would be the slowest pace since the recession in 2009.