Time to down­size Pres­i­dent Zuma

Big busi­ness calls for a cut in Cab­i­net size

CityPress - - Front Page - XOLANI MBAN­JWA, JUSTIN BROWN and DE­WALD VAN RENS­BURG busi­ness@city­press.co.za

Slash­ing the size of Pres­i­dent Ja­cob Zuma’s bloated Cab­i­net came up as one of many mea­sures that busi­ness raised for the first time with govern­ment at a re­cent meet­ing that could help avert a credit rat­ing down­grade. “The is­sue of the size of the Cab­i­net was raised,” a source close to the meet­ing, which was held in Cape Town, said on Fe­bru­ary 9, just ahead of Pres­i­dent Zuma’s state of the na­tion ad­dress.

An­other ex­ec­u­tive, who at­tended the meet­ing but wished to re­main anony­mous, said: “He [Zuma] didn’t an­swer that ques­tion. He skirted it a bit. He said: ‘Look, we’re go­ing to look at it, we’ve got mea­sures to look at con­tin­ued cost cut­ting.’ But you and I know that he’s got an elec­tion com­ing up and to get rid of min­is­ters would not sit well within the ANC.”

The cost of govern­ment in gen­eral and the lack of fis­cal dis­ci­pline are in­creas­ingly be­com­ing is­sues amid the state’s wors­en­ing fi­nan­cial po­si­tion, and as the risk of a down­grade of the coun­try’s credit rat­ing to junk sta­tus in­creases.

Zuma promised busi­ness rep­re­sen­ta­tives at the Cape Town meet­ing that govern­ment would look into cut­ting the size of his Cab­i­net to saves costs, ac­cord­ing to sources who spoke to City Press.

Jabu Mabuza, Telkom chair­per­son and leader of the busi­ness sec­tor’s im­ple­men­ta­tion team, con­firmed that the ques­tion about the size of the Cab­i­net was raised.

He said the sug­ges­tion made by busi­ness was pre­sented as a mere “sym­bolic ges­ture” that would not make any dif­fer­ence to the eco­nomic chal­lenges fac­ing the coun­try.

Mabuza said the sug­ges­tion was un­likely to make the fi­nal cut of the pro­pos­als, which would be tabled at a meet­ing with govern­ment in May.

He said it was in­cor­rect to iso­late the point busi­ness made about the size of the Cab­i­net from the whole de­bate.

“We have to do one of two things – re­duce costs or be more fis­cally dis­ci­plined, but also in­crease rev­enues. To iso­late the one point might also get peo­ple talk­ing,” he added.

“I think that while some of the ac­tion can be sym­bolic, some of it would not move the nee­dle that much. Some ac­tions may be a dis­play of re­straint,” Mabuza said.

The topic of re­straint ad­dresses a key is­sue raised re­cently in a Moody’s In­vestors Ser­vice note on South Africa.

“We could re­vise the rat­ing out­look to sta­ble [from neg­a­tive] if pol­i­cy­mak­ers were able to main­tain spend­ing re­straint de­spite the ac­cu­mu­la­tion of spend­ing pres­sures,” Moody’s said.

On the other hand, Moody’s said that a lower com­mit­ment to fis­cal re­straint im­ply­ing a higher than ex­pected rise in govern­ment’s debt bur­den could lead to a down­grade.

Kyle Mandy, tax pol­icy leader at PwC, said that, while Zuma had said govern­ment would cut costs through var­i­ous means, in­clud­ing slash­ing travel and cater­ing costs, cut­ting the num­ber of govern­ment de­part­ments and ul­ti­mately the num­ber of seats in the Cab­i­net would save the coun­try bil­lions.

“We need to re­duce costs, and to do that, govern­ment has said it will freeze posts, but those posts are crit­i­cal to ser­vice de­liv­ery. The size of govern­ment has in­creased in the past eight years and govern­ment ex­pen­di­ture has in­creased from 27% of the gross do­mes­tic prod­uct to 34% in that time. If we want to save bil­lions, we need to cut un­nec­es­sary de­part­ments. We need to look deeper at du­pli­cated de­part­ments and an­a­lyse whether de­part­ments are in­ef­fi­cient,” said Mandy.

Those who at­tended the meet­ing said the gen­eral view among busi­ness was that Zuma needed to stream­line his Cab­i­net and re­move or merge in­ef­fi­cient de­part­ments.

Pres­i­dency spokesper­son Bon­gani Ma­jola de­clined to com­ment on the dis­cus­sion when ap­proached this week.

Zuma in­creased the size of govern­ment to 35 de­part­ments in his first term as pres­i­dent, which started in 2009.

There were 28 de­part­ments at the end of Kgalema Mot­lanthe’s term as pres­i­dent in 2009.

Zuma also in­creased his Cab­i­net to 75 peo­ple, made up of the pres­i­dent, deputy pres­i­dent, 35 min­is­ters and 38 deputy min­is­ters – up from 57 dur­ing Mot­lanthe and Thabo Mbeki’s terms.

Enoch Godong­wana, the ANC’s head of eco­nomic trans­for­ma­tion, said: “Even if we were to re­duce Cab­i­net to 10, it would not make any sig­nif­i­cant im­pact ei­ther on debt or on growth lev­els. I think peo­ple are try­ing to raise a pe­riph­eral is­sue. What we should be dis­cussing is what, to­gether with busi­ness and govern­ment, those key levers of the econ­omy are that we can touch to stim­u­late growth. That should be the dis­cus­sion.”


HEAVY LOAD Pres­i­dent Ja­cob Zuma

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