Publications
Partners
Cape Town - Business Unity South Africa (BUSA) and the Association for Savings and Investment South Africa (Asisa) want to meet with Treasury's top two men - incoming Finance Minister Malusi Gigaba and his deputy Sfiso Buthelezi.
Despite expressing grave concern over President Jacob Zuma's wholesale Cabinet change, in which he sacked Pravin Gordhan and Mcebisi Jonas, BUSA and Asisa said in two separate statements that they intend to work with the new ministers in the best interests of the economy.
BUSA is seeking to discuss how business can continue to cooperate with Treasury to achieve the much needed structural shifts required by the economy to meet the developmental objectives of the country, it said in a statement on Friday.
Gordhan's axing came in the wake of growing tension between Treasury and Zuma.
A tough fight
Treasury has been battling with state-owned entities, the South African Revenue Service and certain ministries over dodgy contacts and mismanagement. It has been holding the line on state expenditure and was also not in favour of a controversial nuclear deal that commentators have said pales in comparison to South Africa's corrupt Arms deal contracts and costs.
BUSA’s view is that the timing of the reshuffle is most unfortunate. It followed days of tension within the ANC and with its Alliance partner, the South African Communist Party.
"It has the potential to compromise both political and economic stability unless the Executive can demonstrate the necessary capability and consistency, in a responsible manner, to radically transform the economy to achieve the required inclusive growth and employment creation objectives," said BUSA.
The reshuffle had an immediate impact on the value of the rand.
"This, together with the uncertain political implications, will have significant impact and may undermine the progress made by business and its social partners, government and organised labour over the past year."
Proudly SA
BUSA president Jabu Mabuza said South Africa is a resilient country. "We are committed to rallying around South Africa Inc. despite any negative impact from the reshuffle.”
The group said it will be calling an urgent special board meeting within the next few days to assess the potential impact of the Cabinet reshuffle on the economy and to business as a whole.
“Businesses large and small will be affected by the state of our economy. We will keep the country’s interests at the centre of the business response,” stated BUSA CEO Tanya Cohen.
Asisa CEO Leon Campher said although it would not be fair to be critical of Gigaba and Buthelezi, before they have even started, the reality is that the sacking of a highly experienced and respected team at this critical juncture in the country’s fragile economy is likely to come at a high price for ordinary South Africans from all walks of life.
Asisa said it will be requesting an urgent meeting with the new leadership of the Finance Ministry and pledges its support to ensuring that the momentum achieved over the past year by the CEO initiative is maintained.
Confidence in Gigaba
"Gigaba has no financial or business experience," said Dr Adrian Saville, chief strategist at Citadel, adding that confidence in his leadership at National Treasury is likely to be low.
He attributed this to the former ANC youth league leader's performance as minister of Public Enterprises, which he described as insipid and given the visa fiasco that transpired under him as minister of Home Affairs.
With Gigaba widely regarded as a Zuma loyalist, Saville said his appointment represents a direct risk to the institutional strength of National Treasury and the maintenance of the fiscal discipline.
He said less surprising is the appointment of Sfiso Buthelezi, who has been widely touted as a candidate for finance minister or deputy minister.
Buthelezi is a seasoned politician, qualified economist and comes with business experience that includes having served as chief operations officer and director of the Makana Investment Corporation – an investment vehicle for ex-political prisoners, particularly those from Robben Island.
Professor Jannie Rossouw, head of the school of economic and business sciences at Wits University, said Gigaba faces a tough task ahead.
"The new finance minister has to earn the trust of the markets and investors - indeed an uphill battle, given the conditions of his appointment," he told Fin24.
"In short, all this shows that Mr Zuma does not care for the country."
Trust deficit
Professor Piet Naudé, director of the University of Stellenbosch Business School (USB), said Zuma’s reshuffling of the cabinet will diminish the ability of the government to execute its social mandate.
This will also reduce trust in the legitimacy of key democratic institutions.
“We fully recognise the constitutional prerogative of the President to decide on the members of cabinet. However the context of this action, suggests that this decision is not in the best interest of South Africa," said Naudé.
“We call on all South Africans to retain hope whilst we garner our collective goodwill and energy to realise the enormous potential of our country.”
Read Fin24's top stories trending on Twitter: Fin24’s top stories
