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ANC throws its weight behind Gordhan

The ANC says there’s something suspicious about a story claiming the finance minister could be arrested.

FILE: Finance Minister Pravin Gordhan. Picture GCIS.

JOHANNESBURG - The African National Congress (ANC) says it believes a claim that Finance Minister Pravin Gordhan could soon be arrested, was planted to affect the decisions being taken by ratings agencies.

In its most recent edition, the _Sunday Times _said Gordhan could be arrested for his role in the creation of a controversial South African Revenue Service (Sars) unit.

Last night, Gordhan said he was completely innocent and that it was distressing to see certain institutions being manipulated.

Now, the ANC's Zizi Kodwa says there is something suspicious about the story.

"Right on the eve of arrival of rating agencies, the story is planted. Our view is that such stories sometimes are meant to influence the discussions going on currently between rating agencies and as lead by Treasury minister."

Meanwhile, the ANC say it has full confidence in the finance minister.

The rand has lost significant value after the claims and ratings agencies are currently in South Africa to look at whether the country's economy should be downgraded.

Kodwa says Gordhan and President Jacob Zuma have a proper and professional relationship.

"It's about confidence; and making sure that they carry their responsibility and that is why they sign a performance agreement because they are expected to perform. Pravin Gordhan is one of the hardworking ministers and we as ANC have full confidence in him, including the entire Cabinet."

WATCH: Gordhan vs Hawks: What you need to know in 60 seconds

MOODY'S DECISION

Earlier this month, Moody's confirmed South Africa's credit rating at Baa 2 and maintained the outlook at negative.

The ratings agency said the ratings reflect the view that the country is likely approaching a turning point after several years of falling growth.

The negative outlook speaks to the implementation risks associated with the structural and legislative reforms that government, business and labour recently agreed on, in order to restore investor confidence.

Moody's, however, made no changes to South Africa's local or foreign currency country ceilings.

The ratings agency said it would likely downgrade the country's rating if they were to conclude that the government's determination to stabilise and then improve its debt metrics was likely to falter, or if investor confidence were to decline by such an extent that external financing was insufficient to fund the current account deficit on an extended basis.

GORDHAN REMAINS POSITIVE

At the same time, the finance minister says South Africa is on track to rein in its budget deficit to 2.4 percent of GDP by the 2018 / 2019 financial year. But he says the country will not sacrifice spending on key social services.

The finance minister says the country does not have unsustainable debt and is managing the deficit well.

"We delivered, contrary to what some of our honourable members have been saying, a balanced budget which enables us to reduce our deficit to 2.4 percent in the outer year."

LISTEN: 'Strategy to intimidate Gordhan is damaging for SA'

Additional reporting by Aurelie Kalenga.

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