South Africa’s government is continuing its work with business and labor leaders to try avert a sovereign credit-rating downgrade and boost the economy, President Jacob Zuma said.
The parties are working together to reduce policy uncertainty amid a weakening economy and rising unemployment, Zuma said in a televised speech in Pretoria on Monday. The country “can weather the storm,” he said.
Business leaders in South Africa started meeting with government at the beginning of this year after ratings companies warned of a downgrade to junk and Zuma’s shock firing of former Finance Minister Nhlanhla Nene caused the rand to plummet and bond yields to spike. Chief executive officers including Nedbank Group Ltd.’s Mike Brown and Discovery Ltd.’s Adrian Gore said in February they would form three groups to contribute expertise and investments to help the country avoid a credit-rating downgrade, accelerate small business growth and create jobs.
Companies have already raised about 1 billion rand ($65.5 million) to support entrepreneurs and invest in small enterprises, Gore said at the same event on Monday. The goal is to raise 1.5 billion rand and business wants the South African government to match their contribution to the fund, he said.
Moody’s Investors Service affirmed the continent’s most-industrialized economy’s credit rating at Baa2, two levels above junk, on May 6 and kept its outlook on the rating on negative. S&P Global Ratings and Fitch, which both have South Africa one level above junk, will assess the country over the next two weeks, according to Finance Minister Pravin Gordhan.