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New acting Treasury head gives his take on economic transformation

May 16 2017 14:50
Liesl Peyper, Fin24

Cape Town – New acting National Treasury director general Dondo Mogajane gave his definition of radical economic transformation in answer to a question by the Democratic Alliance in Parliament on Tuesday.

A delegation from National Treasury briefed Members of Parliament on the Appropriations Bill, which will be debated in the National Assembly shortly and provides for the appropriation of money by Parliament from the National Revenue Fund.

During question time, the DA's Alan Mcloughlin asked National Treasury to clarify the notion of radical economic transformation. “What is going to be so radically different from the past?”

‘This is radical economic transformation’

Mogajane responded that he was not deviating from anything Finance Minister Malusi Gigaba had said earlier, but that it means measures such as improving education and skills development, strengthening competition laws, improving governance at state-owned enterprises and overcoming the fragmentation that was caused by apartheid spatial planning, to name but a few.

He was echoing Gigaba’s earlier comments about government’s imperative to grow township businesses so that they can become part of the productive economy.

READ: White businesses must champion transformation - Gigaba

“Maybe as a start we need to look at the individual wards of our townships and see what the scale of unemployment is and the type of interventions that are needed.”

Mogajane also said that inclusive growth is no different from radical economic transformation, and the 2017 budget will begin to address some of the challenges.

National Treasury on Monday announced that Mogajane will be acting as its director general in the place of Lungisa Fuzile, who officially left his position at the close of business.

Mogajane, also deputy director general responsible for the public finance division, started his career at National Treasury in 1999.

'Mogajane’s appointment an excellent choice'

DA spokesperson for finance David Maynier said Mogajane’s appointment, although in an acting capacity, is an “excellent” one.

“He has long experience at National Treasury and has the DA’s full support fighting the state capturers, looters and big spenders.”

Gigaba, who was leading the delegtion, said the fact that the richest 10% in South Africa own 95% of wealth in the country is an indictment that needs urgent attention if South Africa is to remain stable.

Gigaba repeated previous statements for the need for inclusive growth and radical economic transformation that will change ownership patterns in the South African economy, while at the same time maintaining fiscal prudence.

“How will we achieve all of this while we maintain the fiscal framework? We need to be realistic,” Gigaba said, “and bite (off) what we can chew.”

He said it’s therefore important to grow the revenue base and the fiscus so that government can do these things on a “gradual basis”.

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