Gigaba on eggshells
ANALYSTS have warned that the views of Finance Minister Malusi Gigaba’s economic adviser Chris Malikane on the nationalisation of mines and banks would create confusion and uncertainty in the markets, despite Gigaba distancing himself from Malikane’s views.
Gigaba yesterday went on a charm offensive, saying he had told Malikane to shut up.
But analysts said Malikane was entitled to his views and Gigaba had a tough task of sending a clear message to the markets when in Washington.
Dirk Kotze of Unisa said Gigaba had distanced himself from Malikane because he was afraid such views would damage the economy.
“Gigaba came to the office as an anti-Pravin Gordhan figure and a pro-Zuma figure, and that he will pursue radical economic transformation,” said Kotze. “His appointment is in favour of economic transformation because he (Malikane) is from Cosatu. His appointment demonstrated that Gigaba’s position was in a sense with the left,” said Kotze.
Now that he was travelling to the US, he was concerned what the markets would say about contradictory messages coming from the government.
Economist Iraj Abedian, of Pan African Capital, said Gigaba was assuming two policy positions, which would not work in the long term.
He said Malikane was entitled to his views and could not be punished for them.
He described the development as unfortunate because it came at a time Gigaba was trying to find his feet at the Treasury.
“Clearly, the minister is having to deal with another sideshow, and it pushes the minister to distancing himself from his adviser,” said Abedian.
He warned, however, that Gigaba was contradicting himself with his policy positions.
“He is becoming a walking contradiction. On the one hand, he says there won’t be change, but on the other he talks about radical economic transformation,” said Abedian.
He said this policy uncertainty could result in investors pulling back until there was clarity from government as the markets did not like contradictions.