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Johannesburg – Radical economic transformation will be done within the fiscal constraints set out by National Treasury, said newly appointed Finance Minister Malusi Gigaba.
Gigaba was speaking at a press briefing in Pretoria on Saturday. He and his newly appointed deputy Sfiso Buthelezi as well as Treasury’s Director-General Lungisa Fuzile spoke to the press about the way forward for Treasury, following a Cabinet reshuffle in the early hours of Friday morning which saw Gigaba and Buthulezi replacing Pravin Gordhan and Mcebisi Jonas, respectively.
Gigaba spoke about the role of Treasury in achieving radical economic transformation. Previous reports indicated that his predecessor Gordhan had come under pressure by members of Cabinet to allocate spend in the budget towards transformation programmes.
READ: Zuma sheds light on radical economic transformation vision
When asked how he would enforce radical economic transformation differently to Gordhan, Gigaba said: “The Issue of radical economic transformation arises from a criticism that for quite a long time, the structure of the economy has not changed.”
He explained that government was criticized for not focusing on the real economy, for industrializing the economy and promoting the creation of entrepreneurs, particularly among black people.
“Radical economic transformation is not about implementing the tender system more, and faster. It’s about changing the structure of the economy to bring on board as many players as possible,” he said.
Gigaba said that the idea of radical economic transformation was not something conjured up in the imagination. He said that South Africa would draw lessons from policies that have worked in mixed-income and developing economies.
One of the issues to be address, include ensuring that government’s R500bn procurement budget be used to empower black people. “We need to be unapologetic about those decisions.”
Among other things he said there should be strong focus on localization and beneficiation of products instead of exporting resources which are extracted as that does not create wealth, nor does it benefit South Africans.
Ownership of Treasury
During his address Gigaba said that there is a perception that Treasury should belong to “orthodox” economists, big business, powerful interests and international investors. He said that Treasury was an institution of a democratic state, and it belongs to the people of South Africa.
“Treasury does not exist for the exclusive use and benefit of some with power and vested interests,” he added.
Gigaba assured that government would remain on its path of fiscal consolidation.
Echoing the views of former finance minister Gordhan, Gigaba said that the pace and depth of transformation has been too slow and superficial.
ALSO READ: Transformation can’t be ‘superficial’ anymore – Gordhan
“We can no longer pretend that growing the economy, as it is currently constituted, will improve the lives of all South Africans,” he said.
Gigaba’s top priorities
Gigaba highlighted that it was his first day on the job but he had been briefed on the most urgent matters to address. Among these include achieving the goals of the president’s nine-point plan for economic growth and job creation.
Among the list of issues to be addressed include the approval of the 2017 Medium Term Expenditure Framework (MTEF). Further, Gigaba will prioritise the alignment of budget to development objectives of the National Development Plan (NDP).
He added that he would continue to collaborate with business and labour to achieve inclusive growth, job and business opportunities. Treasury will also continue to work with the Central Bank to “strengthen and transform” the financial sector, he said.
READ: 'I have no business interests' – Gigaba
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