Trevor Manuel did not have a boss like Malusi Gigaba’s
THREE months is too short a period to judge anyone’s success or failure, but it might suffice as a barometer of impact for Finance Minister Malusi Gigaba.
I’m getting nervous about his prospects of succeeding in stopping our rapid descent into junk status.
Gigaba’s ascent to the top job at the Treasury is reminiscent of Trevor Manuel’s appointment to the ministry in the 1990s.
Manuel, who went on to become post-apartheid South Africa’s longestserving finance minister, was appointed by Nelson Mandela after the emergency exit of two ministers holding the portfolio, first Derek Keys and then Chris Liebenberg, white non-career politicians appointed to allay investor fears.
Emerging from years of global isolation, the economy was fragile and the government of national unity was facing challenges.
The ANC, which had just assumed political power, was preparing its own leadership succession.
Mandela was due to step down as ANC leader.
The markets, which had just been rattled by Manuel’s amorphous markets comment in an unguarded moment, were desperately looking for direction.
This would come later in the form of the growth, employment and redistribution (Gear) plan.
Gear assuaged the markets, but deeply divided the ANC-led alliance.
The jury is still out whether Gear was fully implemented and whether the stability that ensued, resulting in higher GDP growth rates, was attributable to Gear.
Other variables to Manuel’s success are less controversial.
First, he enjoyed the full backing of his boss, Mandela, and of Thabo Mbeki, the de facto head of government, and second, the governing party was more united than at present and had not yet been marred by corruption.
Gigaba, who inherited circumstances that aren’t too dissimilar from Manuel’s, came to the job to replace two respected ministers.
Both, Nhlanhla Nene and Pravin Gordhan, came from the ANC.
The major difference is that today’s ANC is deeply divided and one of Gigaba’s main problems is that he is seen as uncomfortably close to President Jacob Zuma, a divisive figure.
In some ways, though, Gigaba’s circumstances are uniquely worse than Manuel’s.
The economy is at its weakest in a long time – it is shedding jobs en masse amid growing inequality and poverty.
Unlike Manuel, Gigaba has a boss whose lack of interest in the economy is a more serious threat to our recovery than any of his other well-known flaws.
Faced with Manuel-like challenges, including a deep recession and a series of credit rating downgrades, Gigaba has now presented a lengthy inclusive growth action plan. This is the proposed blueprint to take us out of the junk morass.
The plan reads more like the first version of turnaround ideas compiled by departmental heads who don’t really want to give up their bad ways.
It contains a laundry list of issues that lack a central organising idea.
For example, as often happens these days in government speeches, the National Development Plan, supposedly this administration’s uber economic blueprint, gets a casual mention.
No link is made with radical economic transformation.
The other problem is the choice of items that made the cut into the list of priorities.
The curious one is the inclusion of the appointment of a full-time chief executive at SAA.
No mention is made of Gordhan’s idea of merging SAA and the bankrupt SA Express.
It’s disturbing that a simple routine corporate governance issue, such as a chief executive’s appointment, was allowed onto the list of measures to pull the economy from recession.
How then was the vacant post of Eskom chief executive (a far more serious company than SAA) left off the list?
The plan also contains a lot of old ideas that have been stuck in the government system for a long time.
The reform of state procurement, which has compromised many good people, is one.
Of more concern is that there’s nothing that suggests what’s new this time.
Since Polokwane, the Zuma administration has been punting the idea of a developmental state, but has never elaborated further than a mere slogan.
In Gigaba’s action plan, an aspiration is expressed that the cost of implementing developmental mandates of state-owned enterprises will be quantified.
Why is this being implemented only now?
In the part dealing with the public service, the priority is agreeing on a wage settlement in February next year.
No mention is made of the critical issue of the size of the public service, and/or the quality and effectiveness of the services it offers.
Perhaps the minister is setting the bar so low because he knows that it would be too ambitious to expect his colleague, Public Service and Administration Minister Faith Muthambi, to undertake such an exercise.
The other glaring omission is a structured plan or, at least, a process of restructuring the economy to deal with constraints to our speedy recovery, and growth that cuts unemployment, poverty, inequality and corruption. Gigaba has one more shot at inspiring us to have confidence in him.
This comes in October when he delivers a medium-term budget policy statement.
He needs to use the occasion to elaborate an economic policy vision around which we can all rally.
And, more importantly, he needs to face down the cabinet factional battles that stymie the execution of plans.