TREASURY BOSS SET TO QUIT
An exodus of talent and experience, and ‘capture’ of the institution feared following the axing of the finance minister and his deputy
Fuzile and Momoniat are the heart of Treasury. Their departure will have an immediate detrimental impact. They have a notable institutional memory
Senior Treasury officials who report to director-general Lungisa Fuzile expect him to quit after President Jacob Zuma axed finance minister Pravin Gordhan and his deputy, Mcebisi Jonas.
Two senior Treasury executives close to Fuzile said it was almost certain that the directorgeneral, whose contract has another year to run, would not see out his term.
Treasury spokesperson Yolisa Tyantsi did not respond to requests for comment yesterday.
However, a senior Treasury official close to Fuzile said: “Part of the problem is that the fake intelligence report implicates him as well.
“The assessment that he would want to leave is correct. You can’t say he wanted to overthrow the government and still expect him to continue working.
“Zuma should have suspended Fuzile and instituted an investigation to get to the bottom of the claims that he wanted to commit treason.”
The official said the departure of Gordhan and Jonas presented Treasury with two serious risks: members of the executive may want to leave because they don’t agree with the changes, and others may be forced to go.
“For the president to effect the complete capture of the Treasury, he would have to remove the directorgeneral and his team. Treasury is a simple institution to run because a culture has been established where it is run through laws and prescripts.
“It is nigh impossible to corrupt the institution, unless you appoint people who are not afraid to go against what is prescribed.”
Another senior executive said: “I don’t think the director-general is going to stay. Remember, he wanted to leave, but Gordhan begged him to stay. His contract ended in May last year. Gordhan asked him not to leave and extended his contract by two years,” he said, adding that new Finance Minister Malusi Gigaba would most likely want to work with his own director-general.
“If you connect the dots”, all indications, he said, were that Zuma wanted to complete the capture of the Treasury.
“They will not succeed if they have the existing director-general there. You can’t complete the capture. But I can tell you now, he will leave. He will probably be orderly about it and give notice to leave within a month,” he said, adding that Tax and Financial Sector Policy deputy director-general Ismail Momoniat was also likely to go.
“Fuzile and Momoniat are the heart of Treasury. Their departure will have an immediate detrimental impact. They have a notable institutional memory,” the official said.
However, he added that corrupting Treasury would not be easy.
“It is not easy to take a decision without it being recorded somewhere. If a minister feels a deal should go through, he should put it in writing. There are those safeguards, it is rare that there would be no paper trail.”
On Friday evening, Gigaba told journalists: “Changes in the national executive do not of necessity mean there should be changes in the administration. I cannot foresee what individual members of the administration are going to decide.
“I met them this afternoon and I reassured them of my support. I depend on them to assist with the transition and to assist us in implementing government decisions with regard to fiscal policy.
“There is going to be continuity with regards to the administration. I am not coming here to be gung-ho with an agenda to change the director-general. I have known the director-general for a long time. He is a competent and able man and I support him fully in the execution of his responsibilities.”
Gigaba said there would be no reckless administrative changes.
“I have not been given a list of people to walk into National Treasury with,” he said.
It was widely reported that when Zuma appointed Des van Rooyen as finance minister in December 2015, Van Rooyen arrived at Treasury with Gupta allies Ian Whitley and Mohamed Bobat as his advisers. Whitley is ANC deputy secretary-general Jessie Duarte’s son-in-law.
The two senior Treasury officials said at the centre of the removal of Gordhan and Jonas was the closure of the bank accounts of Gupta-owned company Oakbay Resources by local banks, and the subsequent bid by Gupta ally Salim Essa to acquire the Habib Overseas Bank, which requires the finance minister’s approval. “The bank issue is a big one,” said one executive. Another said: “The bank issues were probably the tipping point.”
A third senior Treasury official said Zuma removed Gordhan and Jonas because of “Eskom, SAA, Transnet, the SABC, the refusal to allow the SA Social Security Agency to deviate from procurement policies, the intelligence report and the bank case that began on Tuesday”.
“The plan was to withdraw the case had [Gordhan] been fired earlier,” he said.
The bank case relates to the declaratory order Gordhan applied for to the Pretoria High Court to confirm that he could not intervene in the banks’ decisions to close the Guptas’ accounts.
The official said other reasons included the SA Revenue Service, the Public Investment Corporation, the Financial Intelligence Centre and the SA Reserve Bank.
At a media conference yesterday, Fuzile said the low morale in the department was justified.
“In the beginning we were one of the departments where ministers changed fast.
“Then we learnt lessons, Trevor [Manuel] came in, there was turmoil in the markets, and then stability. People grew to like him.
“The changes that are a little bit uncomfortable, are the changes that come unexpectedly,” he said.
“The car is in motion, but you change the wheels when the car seems to be stable and moving. I am talking now knowing what the people say from inside and how they feel. It is not a reflection of a rejection of change, necessarily. We have no reason not to like Gigaba before we get to know him and what he stands for,” he said.
“Naturally, change scares and concerns people, you wonder what it will bring.”
OUSTED Pravin Gordhan, former finance minister (right), with his former deputy, Mcebisi Jonas
HEAVYWEIGHT Treasury’s Ismail Momoniat
QUO VADIS? Treasury directorgeneral Lungile Fuzile