South African finance minister: Budget may not stave off downgrades

CAPE TOWN (Reuters) – South Africa’s Finance Minister Nhlanhla Nene said on Tuesday his predecessor’s budget last week might not prevent further credit ratings downgrades as new President Cyril Ramaphosa tries to revive the economy.

The state of government finances forced the Treasury last week to take the politically risky step of raising value-added tax for the first time in 25 years.

Ramaphosa, 65, hailed a “new dawn” after his inauguration and has promised to fight corruption.

The move was welcomed by ratings agencies and markets priced in expectations that it would enable South Africa to hang on to its last investment grade rating in a Moody’s review due soon.

Ramaphosa announced Nene’s return on Monday in a reshuffle that saw the removal of some ministers allied to…

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