Inclusive growth should not be seen as a negative - SA Treasury

South Africa's Treasury Department is on high alert following the recent Fitch Ratings downgrade of the country's foreign and local currencies. The agency cited concerns about weakening standards of governance and public finances, particularly in light of the recent political events, including a major cabinet reshuffle. In response to these concerns, Mayihlome Tshwete, the spokesperson for the South African Treasury, reassured investors and credit rating agencies that the policy trajectory of the Treasury remains unchanged despite the executive changes. Finance Minister Malusi Gigaba has emphasized his commitment to the fiscal trajectory set out by his predecessor in the 2017 budget. Tshwete addressed the departure of Lungile Fuzile, the Director-General of the Treasury, stating that while it is a loss for the department, Treasury remains stable with a team of dedicated officials who are committed to transparent operations. He assured that efforts are underway to find a suitable replacement to continue the impactful work done by Fuzile. One of the key concerns raised by Fitch is the nuclear program, which they deem as an expensive endeavor that South Africa may not afford. Tshwete reiterated that the government will adhere to the established plan regarding nuclear expansion and that there are no intentions to speed up or slow down the process. The Finance Minister will continue to communicate with investors and credit rating agencies to emphasize that the country's ability to pursue the nuclear project will be contingent on its affordability. In response to Fitch's apprehension about fiscal consolidation potentially taking a back seat due to the emphasis on radical economic transformation, Tshwete emphasized that inclusive growth is not synonymous with reckless spending. He clarified that inclusive growth aims to increase economic participation in South Africa through partnerships with the private sector, to benefit the overall economy. The Treasury spokesperson reiterated Minister Gigaba's commitment to responsible fiscal management, emphasizing that the government will not spend beyond its means. Overall, the South African Treasury remains focused on maintaining fiscal stability, reassuring investors of its commitment to sound financial management practices. As the Finance Minister prepares to engage with international stakeholders and credit rating agencies, the message is clear: inclusive growth is a strategic objective that will be pursued responsibly without jeopardizing the country's financial stability.