* Graft watchdog had called for change to c.bank’s role
* Central bank must be independent – Gigaba
* Country in recession, Zuma mired in several scandals
* ANC policy meeting to lay ground for Zuma succession
By Joe Brock and Nqobile Dludla
JOHANNESBURG, June 30 South Africa may need
outside financial assistance to get out of its economic spiral,
Finance Minister Malusi Gigaba said on Friday, calling for
“drastic measures” to kick-start growth.
At the same time, embattled President Jacob Zuma admitted
that the economy may not hit the forecast 1.3 percent growth
target set by his government, and urged political allies to
discuss policies, including land redistribution, to revamp the
He called for “radical solutions” — albeit within the
constitution — to redistribute land to the country’s black
Both men were speaking at a conference of the ruling African
National Congress (ANC), which will be looking for a new leader
to replace Zuma in December.
South Africa is in recession and has an unemployment rate of
close to 28 percent. It is also immersed in political rows over
Zuma’s abilities and over how independent the central bank
Gigaba, who was appointed as finance minister in March after
Zuma sacked internationally respected Pravin Gordhan, said South
Africa may need to get outside financial help.
“Should the main indicators continue to disappoint any
further we may have to seek assistance from quarters we have
thus far avoided,” Gigaba added, without elaborating.
Asked by Reuters if he was referring to the International
Monetary Fund, Gigaba smiled and said “Any”.
The rand extended its losses against the dollar as
much as 0.7 percent lower, while bonds weakened after Gigaba’s
comments on the possibility of seeking outside assistance.
Isaac Mashego, senior economist at Nedbank, said with slow
economic growth, the government is going to have borrow more.
“This might mean going to multilateral institutions like the
IMF. This is the worst case scenario,” he said.
The fund’s senior resident representative in South Africa
Montfort Mlachila was not immediately available to comment.
With their economies floundering and currencies sinking,
African states from Nigeria to Zambia have been seeking IMF
assistance to fund infrastructure and plug budget deficits.
Credit downgrades by two of the top three ratings agencies,
based on the economic and political turmoil, have…