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Gordhan, Mboweni retain positions in Ramaphosa's Cabinet

May 29 2019 21:09
Fin24 reporters

Pravin Gordhan has been reappointed as minister of public enterprises by President Cyril Ramaphosa, while Tito Mboweni has retained his position as minister of finance.

President Cyril Ramaphosa outlined the structure of the national executive from the Union Buildings in Tshwane on Wednesday evening.

Ahead of the announcement, trade union federation Cosatu had called for Gordhan's department to be scrapped to reduce the number of Cabinet posts while the union said Mboweni should "retire".

In Ramaphosa's address to the nation, he announced he had reduced his Cabinet from 36 to 28 ministers, but did not merge either public enterprises or finance with other ministries. He said his appointees have a "huge responsibility" and his ministers would have to comply with performance agreements and targets. 

Gordhan was first brought into Ramaphosa's Cabinet in February 2018, shortly after former president Jacob Zuma resigned and Ramaphosa was elected president. 

As minister of public enterprises he will continue to oversee power utility Eskom, freight rail and port group Transnet, South African Airways, state-owned arms manufacturer Denel, and other state-owned entities.

In his first 15 months on the job, much of Gordhan's time was spent focusing on Eskom, as the country faced intermittent load shedding that put pressure on already struggling economic growth. Eskom is about R500bn in debt and does not make a profit from selling electricity at current prices

The state entity's debt burden has been described as a risk to public finances by ratings agencies. On Friday, the utility's CEO resigned, citing 'unimaginable demands' impacting his health. 

Mboweni took over from former Finance Minister Nhlanhla Nene is October last year, after Nene chose to resign in wake of his testimony at the judicial inquiry into state capture. Mboweni has been criticised by unions for questioning if money spent on state support for state-owned enterprises could be better spent elsewhere. 

"Isn't it about time the country asks the question: 'Do we still need these enterprises?'" Mboweni asked the National Assembly when he tabled his maiden Budget in February. 

State capture 

Gordhan's reappointment comes six days after Public Protector Busisiwe Mkwebane found that when he was minister of finance in 2010 he should not have approved the early retirement with full benefits and subsequent re-employment of Ivan Pillay, then-deputy commissioner of the SA Revenue Service.

Shortly after the report was released Gordhan, Pillay and former SARS commissioner Oupa Magashula separately said they intended to challenge the ruling. On Tuesday lawyers for Gordhan filed a review application asking the North Gauteng High Court to set aside the report. Gordhan, in an affidavit, accused Mkhwebane of exhibiting 'stunning incompetence, irrationality and negligence' in the performance of her duties. 

The timing of Mkhwebane's report, just days ahead of an expected Cabinet announcement, was criticised by the Ahmed Kathrada Foundation as a "administrative charade". 

"The timing of the announcement of her findings and subsequent hasty release of the report seems to suggest that it was made with only one purpose in mind, to try and influence the President’s choice of Cabinet members,” the foundation's Neeshan Balton said in a statement. 

In the wake of Mkhwebane's report, the EFF said Gordhan should not be reappointed to Cabinet. On Tuesday, in an interview with eNCA, EFF leader Julius Malema described Gordhan as a "crocodile" which the EFF had by the tail. In reaction to Malema's remarks, Gordhan's spokesperson Adrian Lackay noted Gordhan had previously filed charges against the EFF leader for "insiduous, unsubstantiated public attacks". 

Meanwhile, the ongoing judicial commission of inquiry into state capture has heard from multiple witnesses about billions of rands in alleged tender fraud, collusion and kickbacks at both Eskom and Transnet. 

Gordhan, in his submission to the inquiry in late November, warned of a "determined and vigorous fightback" campaign from those opposed to efforts to implement clean governance at state entities.

cyril ramaphosa  |  cabinet
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