LOOKING TO TITO TO HELP RESTORE SHAKY ECONOMY
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.