Ramaphosa and his money team meet Treasury for crucial talks on budget and economy

President Cyril Ramaphosa has held a secret meeting with National Treasury at a wine farm in Stellenbosch a week after Treasury proposed massive spending cuts.

TimesLIVE understands Ramaphosa summoned finance minister Enoch Godongwana, South African Reserve Bank governor Lesetja Kganyago and Treasury officials to a marathon meeting on Wednesday. The meeting ended on Thursday.

TimesLIVE became aware of the meeting after blue light vehicles were spotted at the popular Stellenbosch wine farm.

Presidency spokesperson Vincent Magwenya confirmed the meeting took place. He said the meeting was held to discuss the state of the economy.

The meeting comes after the Sunday Times reported National Treasury is proposing radical measures to rein in runaway government spending, warning of “unprecedented challenges” and raising a red flag over South Africa's deteriorating public finances.

The mooted steps include a freeze on advertising new appointments, a drastic reduction in spending and a call on departments to fund increases for public servants “within departmental baselines”.

The spending cuts have been widely welcomed and indicated government had “run out of money” and faced a “debt trap” as growth had stalled in the past few years.

This week state-owned logistics company Transnet posted a R5.7bn loss, while commodity prices have tumbled and will not rescue public finances as they have in previous years.

The Treasury document, which is a proposal, follows a cabinet meeting in mid-August at which ministers were warned of government's desperate financial position and dwindling tax revenue.

Government last implemented an austerity freeze in 2013 as it looked to come out of a difficult economic situation in the wake of the global financial crisis of 2008/9.

The proposals follow warnings from opposition parties and mainstream economists that government is living beyond its means while the economy stutters and revenue collection stalls.

On Friday Ramaphosa departed for New Delhi, India to participate in the G20 Leaders’ Summit scheduled to take place on September 9 and 10.

The Presidency said the summit is a forum for international economic cooperation that plays an important role in shaping and strengthening global architecture and governance on all major international economic issues.

Leaders will deliberate on matters of trade, sustainable development, health, agriculture, energy, environment, climate change and anti-corruption, among others.

TimesLIVE