Un­der pres­sure

Pre­par­ing a bud­get is a lonely task that re­quires the fi­nance min­is­ter to fend off nu­mer­ous de­mands from his cabi­net col­leagues. For Pravin Gord­han, it is likely to have been even lone­lier, given a lack of sup­port from the pres­i­dent

Financial Mail - Investors Monthly - - Budget 2017 - Sikonathi Mantshants­ha & Natasha Mar­rian mantshants­[email protected]; mar­ri­[email protected]­nesslive.co.za

SA’s fi­nance min­is­ter will have spent the past three months, par­tic­u­larly the three weeks lead­ing up to this week’s bud­get pre­sen­ta­tion, fend­ing off the de­mands of his col­leagues. These count­less con­sul­ta­tions, for­mal and in­for­mal, can be very lonely for the man who con­trols a bud­get ex­ceed­ing R1 tril­lion.

The task has likely been made lone­lier by the lack of po­lit­i­cal sup­port from the cur­rent pres­i­dent, says a former fi­nance min­is­ter, who spoke to the Fi­nan­cial Mail a few months ago on con­di­tion of anonymity.

Ev­ery mem­ber of Pres­i­dent Ja­cob Zuma’s bloated cabi­net feels his or her projects de­serve to be pri­ori­tised over oth­ers. “In my time as fi­nance min­is­ter I sat in cabi­net meet­ings in the three months be­fore bud­get fend­ing off my col­leagues,” says the former min­is­ter.

He says he had to at­tend for­mal bud­get prepa­ra­tion meet­ings at trea­sury and at the var­i­ous of­fices of his col­leagues. “If we funded ev­ery­thing we were pre­sented with, the bud­get would [have] come up to R7 tril­lion. And when my com­rades pressed their points, they’d look at the pres­i­dent and plead with him for the fund­ing of their projects.”

Ac­cord­ing to the Open Bud­get In­dex, SA’s bud­get­ing process is the third most trans­par­ent in the world.

The process be­gins al­most im­me­di­ately af­ter the bud­get speech is de­liv­ered. It is an in­tensely con­sul­ta­tive process, with two key com­mit­tees — one of min­is­ters and one of tech­nocrats — en­gag­ing with the num­bers for months on end. The bud­get is also en­dorsed by cabi­net once the process has con­cluded.

The fi­nance min­is­ter will on many oc­ca­sions be forced to sit the tech­nocrats down, in front of their min­is­ters, to go through each de­part­ment’s bud­get and see if ex­ist­ing funds can be moved to pri­or­ity projects.

“Once we’d done this, hav­ing pointed out to my coun­ter­part that, in ef­fect, he did have funds avail­able for his lat­est project, I’d ex­cuse my­self and leave the meet­ing,” says the former min­is­ter. “By this time the min­is­ter would be scold­ing his of­fi­cials for not telling him they’d al­ways had the money.”

How­ever, when de­part­ments de­mand money, they are not al­ways nice.

Fi­nance min­is­ter Pravin Gord­han has been find­ing this out the hard way. In the past two weeks, the loud calls for fund­ing have es­caped the rel­a­tive com­fort of a cabi­net lek­gotla or board­room.

Pop­ulist but in­ef­fec­tive min­is­ters, such as Nomvula Mokonyane at wa­ter af­fairs, and their acolytes have la­belled Gord­han an en­emy of “rad­i­cal eco­nomic trans­for­ma­tion” for not dish­ing enough money their way. The ANC Youth League has even called for his dis­missal, ac­cus­ing Gord­han of pro­tect­ing what it calls the in­ter­ests of white mo­nop­oly cap­i­tal.

But these noise­mak­ers take their cue from their se­nior lead­ers. This year, no less a per­son than the pres­i­dent him­self led the charge against Gord­han’s trea­sury. Busi­ness Day re­ported in Jan­uary that Zuma had told a closed ses­sion at the ANC lek­gotla that trea­sury was stand­ing in the way of rad­i­cal eco­nomic trans­for­ma­tion by re­fus­ing to fund cer­tain projects. The ANC de­nied its pres­i­dent had made these com­ments.

You could be for­given for think­ing the ANC is re­fer­ring to a min­is­ter from an op­po­si­tion party, never mind one im­ple­ment­ing its own man­date. Not for them such con­straints as the Public Fi­nance Man­age­ment Act, which lim­its ex­pen­di­ture to projects that can be prop­erly funded af­ter be­ing con­vinc­ingly costed. For this sec­tion of gov­ern­ment, pri­or­i­ties mean noth­ing. “The pres­i­dent just sits there and lets them have a go at you,” the former fi­nance min­is­ter says. “The only time he in­ter­venes is to in­struct me [as fi­nance min­is­ter]: ‘Find the money!’ ”

Zuma, he says, has no sense of money — or that it is fi­nite. “He will fund ev­ery project, if you al­low him to, with­out know­ing where the money comes from.”

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