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<\/a><\/p>\nS&P Global Ratings and Fitch Ratings Ltd. cut the nation\u2019s foreign currency debt to junk in April after President Jacob Zuma appointed Gigaba to his post in place of the respected Pravin Gordhan.<\/p>\n
Gigaba said in an Oct. 12 interview the economy is going through a rough patch and the government needs measures on the revenue side and the expenditure side to achieve its budget targets.<\/p>\n
Bloomberg surveys conducted Oct. 12-18 illustrate the extent of the challenges confronting the minister:<\/p>\n
The economy is expected to grow 0.7 percent this year and 1.2 percent in 2018, according to the median estimate of 22 economists. That\u2019s well short of the February budget\u2019s forecasts of 1.3 percent and 2 percent expansion.<\/p>\n
The revenue shortfall for the year through March 2018 is set to reach 40 billion rand, the median estimate of 11 economists shows. The budget deficit for the current fiscal year is seen at 3.7 percent of gross domestic product, more than half a percentage point higher than the February budget\u2019s forecast, according to the median estimate of 16 economists.<\/p>\n
Gigaba may reveal how much money he intends raising by through additional taxes and asset sales, while saving the details for next year\u2019s budget speech, said Dennis Dykes, chief economist at Nedbank Group Ltd.<\/p>\n
While higher taxes, spending cutbacks and asset sales could help South Africa get a temporary reprieve from ratings companies, the country needs a shift in its fiscal policy, said Arthur Kamp, chief economist at Sanlam Investment Management in Cape Town.<\/p>\n
\u201cThe Treasury can only do so much,\u201d he said. \u201cThere has to be a very strong drive in other government departments and state-owned entities to improve governance, to improve efficiency and to improve their financial situations. If that doesn\u2019t happen you will just continuously be looking to sell off the family silver.\u201d<\/p>\n
Gigaba\u2019s speech comes less than two months before the ruling African National Congress is due to elect a new leader, who will also be its presidential candidate in 2019 elections when Zuma steps down. Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the former African Union Commission chairwoman and Zuma\u2019s ex-wife, are the front-runners for the post.<\/p>\n
\u201cWhat we do need, is a bit of a miracle in December and that the person who comes in just starts cutting the fat,\u201d Nedbank\u2019s Dykes said.<\/p>\n
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