No rad­i­cal pol­icy shift

Man who could be Manuel’s suc­ces­sor says he’s con­fi­dent Trea­sury’s on track

Finweek English Edition - - Cover - TROYE LUND

NEWLY AP­POINTED Deputy Fi­nance Min­is­ter Nh­lanhla Nene may be work­ing through an iden­tity cri­sis caused by his “sud­den” move into the ex­ec­u­tive arm of Gov­ern­ment. How­ever, af­ter two weeks in his new of­fice, he’s sure about one thing: South Africa’s macroe­co­nomic pol­icy – in­clud­ing inflation tar­get­ing – is spot on and the rea­son why it will weather the cur­rent fi­nan­cial storm.

Nene says the move into Cab­i­net from his pre­vi­ous po­si­tion as chair of Par­lia­ment’s fi­nance com­mit­tee (where he was re­spon­si­ble for ques­tion­ing pol­icy and hold­ing min­is­ters like him to ac­count) has been a rad­i­cal shift. But the man who could be Fi­nance Min­is­ter Trevor Manuel’s suc­ces­sor – and who’s been bom­barded with bad chair jokes over his in­stan­ta­neous rise to web star­dom fol­low­ing his in­fa­mous live in­ter­view on SABC re­cently, where his chair col­lapsed – says he’s “get­ting there”.

Af­ter an in­tense two-week in­duc­tion into the work of Trea­sury and its re­lated in­sti­tu­tions, 51-year-old Nene – who has an hon­ours de­gree in eco­nomics as well as a post­grad­u­ate eco­nomics diploma from the Uni­ver­sity of Lon­don – says: “I’m con­tent we’re on track.”

But Nene con­cedes there’s de­bate in the rul­ing party and its al­liance part­ners be­tween those who be­lieve in a more re­laxed fis­cal and mon­e­tary pol­icy and those who think it’s the time to keep it tight. Nene falls into the lat­ter camp.

While his KwaZulu-Natal roots have prob­a­bly con­trib­uted to what his fel­low MPs de­scribe as his “sym­pa­thies” for ANC party pres­i­dent Ja­cob Zuma, the Demo­cratic Al­liance’s Kobus Marais says Nene was al­ways open to constructive in­put from op­po­si­tion par­ties.

Nene’s first ap­pear­ance with his new boss (Manuel) be­fore the fi­nance com­mit­tee he chaired un­til re­cently was to de­liver a strong mes­sage to MPs and, in­di­rectly, to Trea­sury’s vo­cal crit­ics in the ANC al­liance. The crux of their mes­sage was that SA’s pol­i­cy­mak­ers have lit­tle room to ma­noeu­vre. Pol­icy has to be in sync with the cur­rent global fi­nan­cial re­al­i­ties if it has any hope of main­tain­ing the kind of con­fi­dence and in­vest­ment lev­els re­quired to meet this coun­try’s eco­nomic growth and de­vel­op­ment tar­gets.

Nene shrugs off sug­ges­tions the con­fi­dence he ex­presses in the cur­rent eco­nomic pol­icy strat­egy will raise hack­les in the Congress of SA Trade Unions (Cosatu). De­spite his rep­u­ta­tion for a pru­dent ap­proach to fis­cal and macroe­co­nomic pol­icy, Cosatu has wel­comed Nene’s ap­point­ment, say­ing he’ll not “im­pose a rigid ide­o­log­i­cal view”.

Cosatu says it looks for­ward to work­ing with Nene to im­ple­ment reso­lu­tions adopted at the ANC’s Polok­wane con­fer­ence, as well as those adopted at the al­liance’s eco­nomic sum­mit, where SA’s cur­rent macroe­co­nomic pol­icy and inflation tar­get­ing were key ar­eas of con­tes­ta­tion. Cosatu’s doc­u­ments on the sub­jects dis­agreed fun­da­men­tally with Manuel’s ap­proach. A task group was sub­se­quently set up to as­sess the ef­fec­tive­ness of SA’s macroe­co­nomic pol­icy, es­pe­cially in the face of the cur­rent global cri­sis.

Nene makes it plain a fo­rum such as the al­liance’s eco­nomic sum­mit, as well as in­di­vid­ual state­ments, don’t make pol­icy: they “sus­tain” the de­bate. “It’s about de­bat­ing pol­icy and de­bat­ing the right time to change it,” says Nene, who is con­fi­dent the im­passe be­tween Gov­ern­ment’s cur­rent pol­icy and the de­mands be­ing made by the ANC’s al­liance part­ners isn’t ir­rec­on­cil­able. Aside from al­low­ing de­bate on all is­sues, he says the key is for Gov­ern­ment to make sure cer­tain mea­sures are built in at ev­ery level of pol­icy and its im­ple­men­ta­tion.

“What­ever pol­icy po­si­tion we take, we need to make sure that things like un­em­ploy­ment are ad­e­quately ad­dressed,” he says, some­what wide-eyed as he con­cedes “sit­ting on the other side of the fence” (in the ex­ec­u­tive) is go­ing to be chal­leng­ing.

But please, no more chair jokes…

Get­ting there. Nh­lanhla Nene

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