Johannesburg – The appointment of Professor Chris Malikane is a step in the right direction, according to the Congress of South African Trade Unions (Cosatu), which has also spoken out against Malikane’s critics.
The federation showed its support for Malikane in a statement issued on Wednesday, labelling his detractors as “agents of white monopoly capital”.
Malikane had written an opinion piece published in Sunday Times this past weekend, which promoted nationalisation. Treasury subsequently sent out a statement, distancing itself from the article and reiterating that nationalisation was not government policy.
READ: Treasury puts out fires on Gigaba aide's take on nationalisation
“Whilst this appointment is unlikely to change Treasury’s conservative approach to macroeconomic policy issues, it is a step in the right direction,” said the organisation’s spokesperson Sizwe Pamla.
Pamla explained that Malikane’s appointment would give the space needed for a different economic philosophy than the “mainstream free market fundamentalism” followed by Treasury since the 1900s.
The federation also called for Gigaba to work on instilling confidence among South Africans instead of directing efforts to appease ratings agencies. “These institutions do not have the interests of South Africans at heart; otherwise we would not be having a permanent unemployment rate of more than 25%,” said Pamla.
The federation wants Gigaba to prioritise radical economic transformation, local investment and change macro-economic policies to focus on the redistribution of wealth and employment.
Cosatu also wants privatised state companies like ArcelorMittal, Telkom and Sasol to be renationalised and wants Eskom and Denel to be commercialised. “They should regulate the prices of key inputs in the economy such as finance, cement, coal, transport, food and clothing and also put ceilings on ownership of wealth creating assets.”
This nationalisation would result in economic growth and job creation, said Cosatu. “They must put in wage ceilings in order to close the apartheid wage gap among different races and among managers or CEOs and low paid workers,” added Pamla.
Pamla also said that there was a “deficit” of radical economic transformation agents within Treasury and warned the minister not to be “swayed” by institutionalised attitudes of “corporate commercial media” at the expense of South Africans.
“Failure to do this will result in the ANC government being impeached by a dysfunctional economy from power in 2019.”
Earlier on Wednesday Gigaba, met with journalists at Treasury to discuss the details of his trip to the US for the IMF/ World Bank Spring Meeting this week.
READ: Gigaba in last-ditch bid to sway Moody's on downgrade call
Gigaba will meet with ratings agency Moody’s, which has placed South Africa on a 90-day review before it makes a decision on whether to downgrade the country’s rating. Moody’s has South Africa rated two notches above junk at Baa2, with a negative outlook.
Gigaba said the meeting will be an opportunity to reassure the ratings agency that government will not change its policy direction.
He admitted that the Cabinet reshuffle had left investors and ratings agencies concerned, and that during the trip he would be “talking up” the country to ensure continued confidence.
Regarding his new adviser, the finance minister explained that Malikane simply serves as a technical adviser and that ultimately decisions are made by him and not his advisers.
ALSO READ: Gigaba reins in aide, says Malikane not a zama-zama
“Advisers are advisers, they are not the minister, they don’t impose their advice, they only provide it,” he said.
Gigaba explained that his decisions were based on a consideration of facts placed before him. He added that these are collective decisions by Cabinet and the ruling party.
He reassured that government was committed to inclusive growth, and accelerating economic growth and transformation. “I remain committed to fiscal management and discipline.”
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