Ramaphosa definitely 'fit' to be president

Finance Minister Minister Malusi Gigaba

Finance Minister Minister Malusi Gigaba

The ANC took a political gamble by increasing sales tax ahead of elections next year as new President Cyril Ramaphosa seeks to stabilise debt and prevent a third junk credit rating.

The combination of higher taxes and higher spending will mean the South African budget deficit falls from an estimated 4.3% of GDP in the 2017/18 year, to 3.5% of GDP in the 2020/21 year, according to Treasury estimates.

Ramaphosa was sworn in as head of state last Thursday after his predecessor, Jacob Zuma, reluctantly resigned after a nine-year tenure blighted by scandals, policy uncertainty and stagnant economic growth.

"Gugaba has this tainted history and the problem with him delivering the budget is that people know that he has been involved so intimately (with alleged corruption) and can not signal to global markets a credible turnaround", said Georg. The ruling party may be banking on stronger growth this year boosting income, allowing it to provide relief and placate voters in next year's budget.

"Moody's will need concrete reasons not to deliver a downgrade".

The EFF spelled out Gigaba's alleged role in the capture and corruption of state-owned enterprises like South African Airways, Transnet, and Eskom.

A police vehicle patrols outside the residence of the Gupta family in Saxonworld, Johannesburg, South Africa, on Wednesday, Feb. 14, 2018.

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Benchmark bond yields fell 12 basis points to 7.99% on Wednesday, dropping below 8% for the first time since May 2015.

"Coming off a very low base, the growth number is very achievable", Jeffrey Schultz, an economist at BNP Paribas, said by phone from Johannesburg.

The country's main opposition party, the Democratic Alliance, will cooperate with Mr Ramaphosa if he acts in the interests of the South African people, said party leader Mmusi Maimane.

After the speech, Gigaba told Reuters: "We will be able eventually perhaps in 18 months to 24 months to return to investment grade".

Zuma last week Wednesday announced his resignation as state president with immediate effect last week. "We will support him fully".

Ramaphosa said on Friday he would "shortly appoint a Commission of Inquiry into Tax Administration and Governance of SARS‚ to ensure that we restore the credibility of the Service and strengthen its capacity to meet its revenue targets". "The population was given a crash course in democracy, legal systems, the economy, state-owned companies and how safeguards failed us".

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