LOOK­ING TO TITO TO HELP RE­STORE SHAKY ECON­OMY

The Sunday Independent - - GOVERNMENT - AYANDA MDLULI

OVER the past 10 years, the Min­istry of Fi­nance has been a roller-coaster ride that has seen seven reshuf­fles un­der for­mer pres­i­dent Ja­cob Zuma’s ad­min­is­tra­tion and Cyril Ramaphosa’s pres­i­dency.

The Trea­sury is ar­guably one of the most im­por­tant de­part­ments in the govern­ment as it man­ages eco­nomic pol­icy and the govern­ment’s fi­nances, and pre­pares the Bud­get, which are crit­i­cal to en­sur­ing ef­fec­tive ser­vice de­liv­ery and eco­nomic pros­per­ity.

Through­out Zuma’s sec­ond term be­tween late last year and this year, the Trea­sury has been un­sta­ble, hav­ing un­der­gone ma­jor reshuf­fles that have had a neg­a­tive im­pact on the econ­omy.

For­mer min­is­ters of fi­nance in­clude Trevor Manuel, Pravin Gord­han, Nh­lanhla Nene, Des van Rooyen and Malusi Gi­gaba. There have been mo­ments when the econ­omy was thrown into a tail­spin as a re­sult of in­fight­ing over con­trol of the na­tional purse.

How­ever, un­der Gord­han’s first term as fi­nance min­is­ter, aus­ter­ity mea­sures were in­tro­duced which curbed friv­o­lous and waste­ful ex­pen­di­ture by govern­ment de­part­ments. This term dealt largely with the fall­out of global mar­ket forces. The coun­try was on the brink of a re­ces­sion as a re­sult of the global fi­nan­cial melt­down and the en­ergy cri­sis at Eskom.

Other key mo­ments that stand out was when Nh­lanhla Nene was sud­denly dis­missed without ex­pla­na­tion on De­cem­ber 9, 2015, and re­placed with a rel­a­tively un­known David “Des” van Rooyen, an ANC MP. Van Rooyen holds the record for be­ing the short­est­serv­ing min­is­ter in his­tory when he oc­cu­pied the po­si­tion for only three days be­fore be­ing re­moved by Zuma when the fi­nan­cial mar­kets crashed.

He was re­placed by Gord­han, in large part due to mount­ing sig­nif­i­cant pres­sure from po­lit­i­cal and busi­ness groups over the move.

On March 30 last year, Zuma fired Gord­han and ap­pointed Gi­gaba. Un­der Gi­gaba’s ten­ure, VAT was in­creased by 1 per­cent­age point from 14% to 15%, fur­ther squeez­ing con­sumers as the re­sult of mas­sive price in­creases for ba­sic com­modi­ties.

Fol­low­ing Zuma’s res­ig­na­tion and Ramaphosa’s rise to the ANC pres­i­dency, he re­turned Nene as min­is­ter in his Cabi­net reshuf­fle on Fe­bru­ary 26. Eight months later, a dis­graced Nene sub­mit­ted his res­ig­na­tion af­ter star­tling rev­e­la­tions that he had met the Gupta fam­ily many times.

The re­cent ap­point­ment of Tito Mboweni, the for­mer gov­er­nor of the South African Re­serve Bank, comes at a time when the Trea­sury needs sta­bil­ity in light of eco­nomic hard­ships. Un­em­ploy­ment is at an all-time high as the govern­ment con­tin­ues to im­ple­ment aus­ter­ity mea­sures that seems to go against the de­vel­op­men­tal state ini­tia­tive that put eco­nomic growth and jobs over profit of state-owned en­ter­prises.

Mboweni’s ap­point­ment comes at a time when black own­er­ship and par­tic­i­pa­tion in the econ­omy is com­ing un­der scru­tiny. It will be in­ter­est­ing to see how he bal­ances his view­points on the state own­er­ship of min­ing with the de­mands of the fi­nan­cial mar­kets.

He is on record of hav­ing called for a pol­icy shift to­wards rad­i­cal eco­nomic trans­for­ma­tion where the state must own at least 40% of min­ing houses. He has also been vo­cal about the es­tab­lish­ment of a state-owned bank to ad­dress the needs of many black South Africans who con­tinue to be plunged into mas­sive debt, be­cause of “black tax” and un­se­cured loans.

Per­haps hav­ing a fi­nance min­is­ter who is sym­pa­thetic, well versed and has the po­lit­i­cal will to en­sure that our in­clu­sive econ­omy fo­cuses on lift­ing young black South Africans out of the eco­nomic dol­drums is what the coun­try sorely needs.

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