Gigaba’s policy contradictions ‘will create uncertainty in markets’

ANALYSTS are warning that the views of Finance Minister Malusi Gigaba’s economic adviser Chris Malikane on the nationalisation of mines and banks will create confusion and uncertainty in the markets, despite Gigaba distancing himself from Malikane’s views.

Gigaba yesterday went on a charm offensive, saying he had told Malikane to shut up.

But analysts said Malikane was entitled to his views, and Gigaba had a tough task of sending a clear message to the markets when he travelled to Washington.

Dirk Kotze of Unisa said Gigaba had distanced himself from Malikane because he was afraid such views would damage the economy.

“Gigaba came to the office as an anti-Pravin Gordhan figure and a pro-Zuma figure, and that he will pursue radical economic transformation.

“His appointment of Malikane is in favour of economic transformation because he (Malikane) is from Cosatu.

“His appointment demonstrates that Gigaba’s position is in a sense with the left.”

On the one hand he has said nothing will change in terms of policy, but on the other there will be radical economic transformation.

Kotze said Gordhan had never assumed two positions when he was in charge at Treasury.

Economist Iraj Abedian of Pan African Capital said Gigaba was assuming two policy positions, which would not work in the long term.

He said Malikane was entitled to his views and could not be punished for that.

He described the development as unfortunate because it had come at a time Gigaba was trying to find his feet at the Treasury.

“Clearly, the minister is having to deal with another sideshow, and it pushes him to distancing himself from his adviser.”

He said this policy uncertainty could result in investors pulling back until there was clarity from the government.

Professor Sipho Seepe said Malikane should be allowed to express his views.

“Part of the challenge we have in this country is the inability to craft ideas that will guide us.

“Most of the ideas we take are borrowed from elsewhere.”

He said because Malikane came from a different school of thought he should be allowed to express his views and not be attacked.