November 14, 2017 / 2:56 PM / 5 days ago

S.Africa government denies presidency interference in budget process

JOHANNESBURG, Nov 14 (Reuters) - South Africa’s presidential fiscal committee, set up to provide advice on spending priorities, is not interfering with the Treasury’s role in setting fiscal policy, the government said on Tuesday.

The denial came a day after the long-serving head of the budget office in the National Treasury quit the job, allegedly over complaints that President Jacob Zuma was interfering in the budget process.

The presidency and the Treasury have denied this, with the latter saying the deputy director-general in charge of budget issues, Michael Sachs, had resigned to serve the government in a different role.

“The advisory role of the Presidential Fiscal Committee does not in any way interfere with the institutional arrangements of the budget cycle,” Minister of Communications Mmamoloko Kubayi-Ngubane said in a statement.

The committee was mandated to work with Treasury and other stakeholders to find “creative ways” of meeting South African fiscal targets and resolving competing priorities, the statement said.

Rumours of Sachs’s resignation saw the rand weaken as much as 1 percent on Monday, adding to the previous week’s losses to 12-month lows on concerns about a possible ratings downgrade should Zuma announce increased education spending.

S&P Global and Fitch cut South Africa’s foreign currency credit rating to junk in April after Zuma abruptly fired Pravin Gordhan as finance minister, and have warned of further downgrades should the independence of financial institutions be threatened. (Reporting by Mfuneko Toyana; Editing by Olivia Kumwenda-Mtambo/Mark Heinrich)

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