S. Africa to take urgent steps to avoid further downgrade: finance minister

The South African government will do what it can to avoid a further downgrade, Finance Minister Malusi Gigaba said on Thursday.

Urgent steps must be taken to prevent international rating agency Moody's from downgrading South Africa's credit rating, Gigaba said in Cape Town after a meeting with local investors.

Gigaba assured investors of policy certainty in different policy programs, including the mining and telecommunications sectors.

He pledged that the government would take immediate action to improve the financial performance and governance of state-owned companies.

Gigaba said he is planning to meet with the Moody's to ensure the agency that South Africa is willing to continue on the course of fiscal discipline and reducing the country's debt.

"We will do all we can to avoid another downgrade and one of the ways to do that is to engage with Moody's directly," he said.

Moody's has put South Africa on review for a possible downgrade after Standard & Poor's and Fitch downgraded the country's rating to junk status respectively on April 3 and April 7.

The downgrades followed a drastic cabinet reshuffle by President Jacob Zuma on March 31. The reshuffle saw the sacking of well-respected Finance Minister Pravin Gordhan, a move that rattled the nerves of investors. Gigaba, former minister of home affairs with less financial experiences, replaced Gordhan.

A third downgrade by Moody's is expected to raise the possibility for a recession.

"For us, in order to fend off a downgrade by Moody's, there are urgent steps that we need to undertake in the form of providing clarity in the different policy programs," Gigaba said on Thursday. Endite