New finance minister talks tough on SOEs

FINANCE Minister Malusi Gigaba has pledged to rein in errant state-owned entities that took on his predecessor, Pravin Gordhan, over issues related to procurement.

Addressing his maiden media conference as finance minister in Pretoria yesterday, Gigaba said this trend undermined the government and its policies, and could not be tolerated.

“All government must be concerned about the SOEs making statements that defy government . . . Government policy cannot be rejected by an entity of government . . . There must be consequences,” he said, adding that he would engage the relevant shareholder ministers to ensure that such snubs had consequences.

Gigaba’s news conference was part of an initiative to allay fears following the shock cabinet reshuffle announced by President Jacob Zuma late on Thursday, in which Gordhan and his deputy Mcebisi Jonas — among others — were axed. Gordhan and his department had been seen as a target for Zuma-linked interests who want influence over the Treasury.

Zuma’s move, said analysts in reaction, could prompt rating agencies, in particular S&P Global Ratings and Moody’s, which are expected to announce their decision on South Africa’s credit rating this week, to downgrade the country.

At the media briefing, Treasury Director-General Lungisa Fuzile did not respond directly to a question about his continued tenure. But the accusation that he, along with Gordhan and Jonas, were in a secret meeting against the interests of South Africa will sting.

Curiously, while his political principals were removed for this reason, he was untouched and it remains to be seen what role he will see himself playing in an administration that no longer trusts him.

Since the inception of the Treasury’s chief procurement office, the department has been involved in run-ins with a number of SOEs that have large procurement budgets, including Denel, Eskom, the South African Social Security Agency, the SABC and Transnet.

This week Denel instituted a court bid to reverse the Treasury’s decision to halt a joint venture with a Gupta family-linked arms manufacturer, VR Laser Asia.

In his farewell news conference at Treasury headquarters on Friday, Gordhan spoke of being publicly attacked by government agencies, including those that reported to him.

“Why is Denel going to court against the Treasury?” he said. “In what circumstances do you get the chairperson of an SOC attacking a minister of government publicly? Why is that chairperson allowed to continue to do so?”

Gigaba said yesterday that he would speak to fellow cabinet ministers responsible for the entities and agencies concerned in a bid to get their cooperation. He dedicated many of his remarks to “radical economic transformation”, saying he wanted the Treasury, its policies, management and communication to be accessible to all South Africans.

Gigaba promised to work to maintain an investment-grade credit rating for the country.

DA finance spokesman David Maynier said although Gigaba’s news conference had been aimed at restoring confidence and calm, it had not done so.