The Rise and Rise Of Peggy Serame
Afew hours before the Friday, 8:50pm announcement that she would become the country’s next finance minister, Peggy Serame shared a performance review of her then ministry.
According to the numbers, the Ministry of Investment, Trade and Industry and the various agencies and units under its auspices, facilitated the creation of about 12,000 jobs, P2 billion worth of domestic investment and expansion, P774 million worth of foreign direct investment and P2.2 billion worth of export revenue, in the 2020-2021 financial year. The figures are generally lower than 2019, but still healthy given the broad sectoral stress caused by COVID-19, which saw the economy contract by 7.9 percent.
As of 8:50pm Friday, however, Serame takes on a different and significantly heavier challenge as the country’s finance minister.
Not that the trade ministry was a walk in the park. Where the finance ministry allocates funds across the economy, Serame’s former ministry is responsible for ensuring these funds, coupled with policy and support, actually enhance the performance of businesses and, in turn, the overall economy.
The trade ministry is the government’s tool for engaging all entities from established corporations to SMMEs and the informal sector, ensuring the country’s much-lauded investment climate remains attractive while pursuing the elusive target of effective citizen economic empowerment. Appointed minister in November 2019 and in the process, replacing her former boss, Bogolo Kenewendo, Serame had a baptism of fire a few months later, with the onset of the coronavirus (COVID-19) collapsing most
business sectors mainly because of the interventions government put in place to fight off the pandemic. Generally unknown to the broader public during her previous role as trade permanent secretary, Serame shot to national prominence when she presided over a series of alcohol sale bans instituted from April last year. She became the stuff of local memes and gained a variety of nicknames on social media, some in jest, others in anger, at the decisions she was taking.
Her thick skin will be called upon even more at the finance ministry. Unlike the trade ministry, which faces the business sector, the finance ministry faces government, with ministries and departments constantly extending hands for more funds and asking for indulgences.
While the technocrats hammer out the numbers, the minister, as the political head, makes decisions with economy-shaking potential regularly either by commission or omission.
From the resilient performance at the trade ministry she shared on Friday, at finance, Serame inherits a P21 billion deficit from the immediate past financial year, and another P6 billion projected for the current year. She faces the burden of guiding the P14 billion Economic Recovery and Transformation Plan, the blueprint government is almost singlehandedly banking on to resuscitate the economy.
And she will have to do the job with less. The Government Investment Account, which previous finance ministers have tapped into the plug budget deficits, was measured at P3.3 billion in December, a rock-bottom figure never before reached.
The P30 billion domestic borrowing programme is in full swing, but capital market participants have been sloth to fully lend to the government as seen by the numbers coming out of the monthly auctions.
Budget revenues from the local economy are dicey also, as tax increases and other increases in administered prices are weighing on local businesses, while consumers’ tighter disposable incomes mean lower demand in the economy. Only the diamond sector seems to have shimmers of hope. Besides thick skin, Serame will have to call on her training and experience to navigate the storm. Serame started her career at the finance ministry nearly 30 years ago, rising through the ranks to a senior economist. Her experience includes hands-on work with the National Development Plans, budget process and economic policy. She left the finance ministry for the trade ministry in 2011 so in a sense, her appointment as finance minister is a triumphant return home for Serame, but no one will be rolling out the red carpet. Instead, Serame will face the second baptism of fire in her career.