Gordhan to maintain prudent expenditure

The new finance minister said he is well-aware of how the markets have reacted over the past week, but that he will ensure prudent expenditure remains the norm.

Reappointed Finance Minister Pravin Gordhan has appealed to the nation to work him with to continue to build a resilient economy. “The facts about the developments that took place last weekend and the response of the financial markets are well-known, ” said Gordhan said yesterday in Pretoria.

“Our currency fell, the stock market dropped by 2.94 percent and bond yield shot up by over 150 basis points. Our government is acutely aware of the financial impact this had on those who are invested in this economy.”

In a dramatic turn of events, President Jacob Zuma sacked David Van Rooyen as finance minister just days into his job. Speculation is rife that Zuma was pressured by the ANC to reconsider his decision. Gordhan said the National Treasury will restore confidence by doing the right things. “We understand that it is our duty to continuously earn the trust and confidence of the South African public,” he said. “We will stay the course of sound fiscal management. Our expenditure ceiling is sacrosanct.”

Gordhan made it clear that the National Treasury will not cut pro-poor programmes, growth-inducing programmes and investment. “Instead we will seek to increase investment in the 2017 budget,” said Gordhan. “We are going to redouble our efforts to ensure efficiency of expenditure across the public service. New measures are being put in place to contribute to reducing corruption and enhancing transparency.”

Gordhan said the risks of the fiscal framework is the financial state of state-owned companies. He vowed that the government will not spend money it does not have. Gordhan said former finance minister Nhlanhla Nene’s decision on South Africa Airways airbus deal still stands. A confident Gordhan said he was returning to a portfolio that “was assigned to me for five years between 2009 and 2014”.

“I’ve been associated with the finance family for almost two decades,” said Gordhan. “I’m relatively familiar with the terrain and its challenges.— The Citizen.