Finance Minister Pravin Gordhan arrives to deliver his 2016 budget address at Parliament in Cape Town. Picture:  REUTERS/MIKE HUTCHINGS
Finance Minister Pravin Gordhan arrives to deliver his 2016 budget address at Parliament in Cape Town on Wednesday. Picture: REUTERS/MIKE HUTCHINGS

THE developed world should regard developing countries, such as those in Africa, as their partners and stop reacting rashly when the US Federal Reserve changes course, Finance Minister Pravin Gordhan said on Thursday morning.

The minister was speaking at a breakfast in Cape Town, which was jointly hosted by eNCA and the SABC, following the delivery of his budget speech in parliament on Wednesday.

In response to a question from German ambassador Walter Lindner about what his message to foreign investors should be, Mr Gordhan said: "Africa is uncharted territory and SA specifically has the most sophisticated business infrastructure on the continent.

"Yes, there are problems with connectivity, but we want to discourage the developed world to cause so many ebbs and flows in emerging markets. Things keep changing and your capital inflow and outflow hurt developing countries."

Banking Association of SA MD Cas Coovadia asked Mr Gordhan if he had the necessary support from the rest of the government for the budget he proposed, especially where state-owned enterprises were concerned.

"Minister, it’s a tough environment in which you had to draft the budget and reaction from the business sector was very positive. But the government also needs to get behind this budget and take the hard decisions to implement the plans."

He asked Mr Gordhan if privatisation of state-owned enterprises (SOEs) was an option, but the minister did not answer the question directly, saying: "Privatisation has become a deadly word in SA, as there’s a view that state assets should be utilised for developmental purposes.

"In nominal terms that’s fine, but we find ourselves in an environment where we just don’t have enough money to give, say, R3bn to SAA (South African Airways). That’s why we need to bring multiple brands (in SOEs) together and merge boards," Mr Gordhan said.

"We need to mobilise all the capital we can get. And apologies to those who make their money sitting on boards."

SABC Morning Live presenter Leanne Manas asked Mr Gordhan to respond to some viewers’ questions about the size of President Jacob Zuma’s Cabinet, and the burden it put on the economy.

"The finance minister will be fired if he says anything about the size of the cabinet," Mr Gordhan quipped. "I can’t comment on that. Constitutionally that is the president’s prerogative. If you actually look at the numbers, it (the Cabinet) doesn’t cost billions of rand. But having two houses (in Cape Town and Pretoria) does."