ANC does not take rating agencies seriously
Unless the Economic Freedom Fighters with their gift for political theatre come up with something entertaining, President Jacob Zuma's state-of-the-nation address to Parliament later this week is likely to be a bore. But it will confirm that the African National Congress (ANC) does not take the international credit rating agencies seriously. Even though downgrades of the government's credit rating to sub-investment (or "junk") status are coming closer, the agencies will be fobbed off with the usual empty promises.
Among those who have done this in the past is none other than Pravin Gordhan. In October 2012, during his previous stint as minister of finance he dismissed recent downgrades (though not yet to junk) by Moody's and Standard and Poor's as "inappropriate" and declared that there was "keen" acknowledgement in government of the challenges facing the country. In March 2012 - almost four years ago - the National Treasury said the government would "continue to place higher economic growth and job creation at the core of economic policy".
In January 2013, responding to another downgrade, the Treasury said government was "aware of the challenges of poverty and unemployment". Two months later the Treasury declared that the government would address these challenges and invest in infrastructure.
Since then infrastructural investment has lagged and unemployment has continued to rise. The only reason why poverty is not worse is that its incidence has been reduced by social grants, continued financing of which is one of the challenges facing Mr Gordhan as he prepares his 2016 budget.
Two years ago Mr Gordhan urged the private sector to "come to the party" and drive the economy, with the state playing a facilitating role. Since then we've had a spate of legislation undermining property rights and the confidence of investors. Punishments for infringements of racial and labour laws have been made stricter. The Treasury is not responsible for this, but these developments contradict its promises and assurances about growth and jobs. Does it even believe its own press statements? Does Mr Gordhan seriously think all these interventions will entice business to come to his "party"?