‘Mboweni’s hands are tied’
Few options available to Finance Minister, but Budget ‘must include plan to rein in debt’
IN another desperate plea to party members as corruption perceptions continue to weigh heavily on his party, ANC president Cyril Ramaphosa has warned that this would wipe out the party if it is not arrested.
Ramaphosa said what had made the corruption challenge worse than before was that those who wanted to use their power to amass wealth through corrupt means were even more determined to get their way into influential positions of public office.
He sounded this warning while addressing a Raymond Mhlaba (a late stalwart of the ANC) memorial lecture in Vryheid yesterday.
He pleaded with members to emulate people like Mhlaba, who worked for the people instead of working to accumulate wealth for themselves using public office.
“The unbridled contestation within our ranks for public resources and the graft that has become commonplace in many of our public institutions must present a great threat to the advancement of our national democratic revolution.
“These undermine economic and social development, they also erode democratic practices, they disempower our citizens and weaken the national liberation movement,” Ramaphosa said.
He added that graft and the associated phenomenon of state capture were obstacles to the achievement of radical economic transformation, a 2017 policy of the ANC which was yet to get off the ground.
Additionally, Ramaphosa told the about 5 000 party members who came to listen to him that corruption also hindered the implementation of a broadbased black economy and development of small and medium enterprises.
“Corruption has also weakened the ANC and its allies, and if we do not do something about it, corruption will ultimately also destroy the ANC. We need to be taking steps to doing this and we are already seeing a lot of progress that we are making within our own ranks.
“This also calls for concerted efforts for structures and leaders in our movement. It requires that we examine our behaviour and act only in the interest of the people of South Africa. This means that we defend and embrace all the values that Oom Ray (Mhlaba) stood for and lived for. We must emulate the honesty, the humility, the discipline and the passion for the people that truly defined the way Oom Ray approached the issues of leadership,” he added.
Ramaphosa also pleaded with party members to embrace unity, saying a divided ANC would never be able to deliver for the people of the country.
The calls come as cracks within the governing party continue to widen, with a faction saying Ramaphosa should be removed from his seat at the party’s national general council in July because he was failing to implement the radical economic transformation resolution.
“Nasrec gave a task to unite the ANC and we must renew the ANC,” he said, adding that there were some in the party who thrived on factionalism.
“Comrade Mhlaba was not a factionalist like some among us who like to divide our organisation. They work through factions. We are saying as the ANC, our task now is to build unity and get rid of all the factions, we must not have people who will say ‘I belong to so and so’.”
Like ANC factionalists, former president FW de Klerk did not escape the wrath of Ramaphosa for saying apartheid was not a crime against humanity.
Without mentioning him by name, Ramaphosa told the ANC members that subtle racism in the country was on the rise and some were showing that sign by trying to discount the brutality of the apartheid system.
“They also seek to manipulate memories of our apartheid past and present apartheid as having been less than actually it was – a crime against humanity and a crime against the people of South Africa,” he said.
POLITICAL parties and economists have warned that Finance Minister Tito Mboweni is walking a fiscal tightrope in the Budget with very little money to fix many of the broken things.
The DA, IFP and Cope agreed that this would be the toughest Budget in many years, but called on Mboweni to draw a line in the sand against warring ANC factions, to get the economy off the ground.
DA spokesperson on finance, Geordin Hill-Lewis, said yesterday that they wanted to see a credible budget on Wednesday.
“The first thing we want to see is a credible plan to get the debt under control,” said Hill-Lewis.
The country’s runaway debt is approaching 60% of Gross Domestic Product.
Hill-Lewis said if there was no proper plan to rein in the debt, it would not be a credible Budget.
Mboweni could not afford to be stopped from implementing structural reforms in the economy by the warring factions in the ANC.
He said state-owned entities had to feature in the Budget, but the DA do not want any further bail-outs for SAA.
IFP chief whip Narend Singh said this was going to be a tough Budget for Mboweni.
It was clear that there would be tax increases this year.
Singh also warned that corruption was taking away necessary funds from basic services.
“If all these funds we read about every day were not stolen or misappropriated we would have sufficient funds for basic services.
“We read horrific stories about corruption,” said Singh.
In the past, ministers of finance had said they would tighten up measures to clamp down on corruption, but no plan had ever been offered.
For some of the SOEs the IFP would favour full or partial privatisation, Singh said.
The ANC has refused to back the idea of privatising SOEs.
Cope spokesperson Dennis Bloem said Mboweni was in a tight corner and there would be no miracles in the Budget.
He said the country’s SOEs were critical to the economy and the government needed to sort them out.
Eskom’s load shedding was having a huge impact on the economy.
“This thing of SOEs is a serious problem; if it’s not going to be addressed forget about the Budget,” said Bloem.
Economists Mike Schussler and Iraj Abedian warned that Mboweni’s hands were tied.
Abedian, of Pan African Capital, said Mboweni had few options available to him, including cutting expenditure in the Budget.
“He’s literally got very few options other than deep cuts,” said Abedian.
He will have to freeze salaries and new recruitment in the government.
He said Mboweni would have to get the private sector to stimulate the economy.
The economy has been sluggish for a number of years now.
Schussler, chief economist at Economists.co.za, said it was likely there would be a VAT hike. But there would be yearly increases in sin taxes as well, he said.
The economy needed to grow, but the government could not keep bailing out SOEs.