A new Gigaba or just the same old act?

It helps to work with sceptics. I’m charitable by nature, happy to assume people mean what they say. So it was yesterday afternoon. After listening to Finance Minister Malusi Gigaba deliver his first medium-term budget policy statement, my colleagues and I walked down a floor to record this week’s episode of the BusinessDayTV show, Editing Allowed.

I was comforted, as I always am, by the presence on the panel of Financial Mail deputy editor Sikonathi Mantshantsha. He takes no nonsense from anyone — me included.

My view on Gigaba’s speech was that he had been brutally honest about the mess we are in. This was a new Gigaba. I vividly remember a dinner with him and the bosses of Standard Bank a few years ago at which he told us he didn’t have much time for the private sector. The government didn’t need it.

Yesterday, after admitting to a string of disasters – a colossal R51bn shortfall in tax revenue (and this a tax increase in 2016), a steep climb in the budget deficit to 4.3% of GDP, a fall in February’s economic growth forecast from 1.3% to 0.7%, and a forecast that government debt would be 60% of GDP by 2022 (from less than 30% when Jacob Zuma became president in 2009) – Gigaba revealed he has formed a new view of business.

“We desperately need business that invests,” he said, commending private sector initiatives on youth unemployment and small business funding.

Economic growth, Gigaba has discovered, is quite important. You could almost hear the nation’s economists cheering, even though he was unable to say how he planned to make growth occur. Don’t underestimate, though, the importance of him merely realising the fact. Like a convert, he turned to his colleagues on the government benches.

“Honourable members,” he intoned, “let us for a moment consider the importance of economic growth.” He then proceeded to list the obvious. It is quite a thing to have to say in a modern economy, but that’s the ANC for you. Don’t underestimate the levels of idiocy in Cabinet. There are senior people in it who believe their job is to collapse the economy so it can “start from scratch”.

Wisely, probably, he skirted nuclear power. To his right, Zuma was only pretending to be asleep when Gigaba quoted him back at himself: “With regard to nuclear energy, we reiterate that the programme will be implemented at a pace and scale that the country can afford,” Zuma had said in May.

Gigaba has said twice in the past week that we simply can’t.

He was, though, sharp with Eskom, where governance issues were “of grave concern” and where Eskom’s debt “has become a significant risk to the entire economy”. He promised a new Eskom board by the end of November and a new executive shortly after that.

He also promised a strategic partner for South African Airways (SAA) but repeated his thin excuse for supporting a national airline in the first place.

“It is in our national interest to have influence over our connectivity to all parts of the world, and not to have to rely exclusively on the profit and scheduling considerations of global airlines.

“SAA sells SA’s economy, tourism and culture to every one of its passengers. Global airlines do not, and will not, perform this priceless marketing and branding role.”

That is utter nonsense. Global airlines would pay us to allow them to do that. And if it is all about reach and marketing he could easily spin off the international arm of the airline into a separate business and let the private sector pick up the slack at home.

Mantshantsha, however, was having none of my “new” Gigaba. It was all just talk, he said. Where’s the action? Gigaba has no say over who sits on the Eskom board and, besides, everything he has touched in the economy in his career so far has turned to ruin. Why should we believe anything he says now?

The markets agreed. The rand crashed during the speech and bond yields, a measure of how much it costs us to raise debt, rose to more than 9%.

My only consolation in all of this is that at least Zuma and his loyalists have had the facts spelled out to them by someone who is not Pravin Gordhan or Nhlanhla Nene.

The facts, Hilary Joffe reckoned when she joined us from Cape Town, make further rating downgrades more likely rather than less.

Gigaba has always been good at sounding in command even when he manifestly isn’t. I hope this was not another of those occasions and that he finally understands that running a modern economy successfully requires hard work and discipline.

“We must do the hard things to move from a vicious cycle to a virtuous one,” he said, arguing for a new kind of economy; a more inclusive and growing one. We all want that.

On Wednesday I thought he had sort of stood up to Zuma. It was only a start, though. He will have to stand up to the boss again and again. And when you’re running Zuma’s Treasury, you’re never safe.

ECONOMIC GROWTH, GIGABA HAS DISCOVERED, IS QUITE IMPORTANT. YOU COULD ALMOST HEAR THE NATION’S ECONOMISTS CHEERING