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Johannesburg - Former Finance Minister Pravin Gordhan said on Tuesday that South Africa is not heading towards the same fate as Venezuela, which is in the throes of an economic and political crisis.
Speaking at the Independent Financial Advisers symposium in Sandton, Gordhan was asked whether South Africa could face similar economic conditions to the South American country.
“I don’t think we’ll get there,” he said.
“But to prevent a Venezuela we have to become active citizens. If you are a South African you should be involved to ensure that we don’t get to Venezuela. All of us have to send a clear message to the kleptocrats that that was not what we wanted.”
Nenegate
Gordhan, an outspoken critic of President Jacob Zuma, said a key date in South Africa’s recent economic history was when his predecessor as finance minister Nhlanhla Nene was dismissed “under false pretenses”.
Nene was removed from Cabinet by Zuma on December 9, 2015.
Gordhan said Nene's axing was the start of a new approach by government that aimed to manoeuvre "certain actors" into positions of power so they could gain control of critical state organs.
“The conditions were not for economic growth or for a better fiscal framework, but (to) continuously create conditions that will enable 'you know who' to loot from state coffers,” he said.
“If that is your focus, you neglect critical economic areas. Ultimately the consequence is low investment, low levels of growth and unemployment.”
Zwane
Commenting on the apparent disconnect between the government and the business sector, Gordhan singled out Mineral Resource Minister Mosebenzi Zwane for criticism.
He said when he was in Cabinet care was taken to bring labour, business and the government together.
“But Zwane and the mining industry are not going to get along,” he said. “That is because he (Zwane) has a certain agenda for this country, and that agenda is not good for South Africa.”
He said it was possible to the change the mining industry for the better if “right thinking leaders” were put in place to work with the sector.
Using his past engagements with credit rating agency Moody’s as an example, Gordhan said South Africa should work to meet the agency's benchmarks in order to improve the country's credit ratings.
“Moody’s said that if we get our politics right, the ratings will go in the right direction,” Gordhan said. “If key institutions, particularly in the economy, are steady, it will act as a plus factor.
“The benchmarks are clear. If we don’t meet that the benchmark, there will be consequences.”
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