Time for new era of leadership at Treasury, says retiring Donaldson

May 10 2017 07:15
Matthew le Cordeur and Liesl Peyper

Cape Town – National Treasury deputy director general Andrew Donaldson has retired after 24 years of leadership at the crucial institution with other stalwarts, but he plans to keep working with the department, he explained in an interview with Fin24 on Tuesday.

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News of Donaldson’s retirement this week sparked fears of an exodus of Treasury’s key leadership, following the recall of Pravin Gordhan (minister) and Mcebisi Jonas (deputy minister), followed by the resignation of Lungisa Fuzile (director general) in April.

However, Donaldson told Fin24 that a new era of young leaders have been groomed to take over key positions in the department and said he has been handing over various roles over the years.  

“I don’t think there is big turnover at Treasury,” he said. “There is no big exodus. Treasury will remain a strong central institution in South Africa.

“There has been a growth of the internship programme and Treasury continues to offer great opportunities to young economists,” he said. “Treasury is an exciting place to work and attracts people who might otherwise go to finance or the banking sector.

“My former management responsibilities are now in capable younger hands.”

These include his roles as head of Public Finance (now headed up by Dondo Mogajane), head of the Budget Office (now headed up by Michael Sachs) and most recently acting head of the Government Technical Advisory Centre (now headed up by Shahid Khan in an acting capacity, another Treasury stalwart).

Donaldson likely to continue working with Treasury

Donaldson said he will continue to have some connection to Treasury and he hopes to continue working in public economics. “It depends on the new leadership,” he said. “I might be 59, but I hope there are a few more years of useful career. I am simply moving from formal management.”

Finance Minister Malusi Gigaba told Parliament on Tuesday that he is aware of Donaldson’s decision, but he will continue to make use of his expertise as he has a great deal of of experience, especially with the National Health Insurance (NHI).

The position will be advertised in due course, but Gigaba said his first priority now is to appoint a new director general (DG) in the place of Fuzile.

“I want the DG to also have a say in the appointment of a new (deputy director general) DDG (in the place of Donaldson).”

Gigaba said he hopes to have at least interviewed people for Fuzile’s position by the end of May.

Fuzile told guests at a UCT Graduate School of Business event on Tuesday evening that there are negotiations under way to ensure Donaldson can continue working on various projects at Treasury.

From university to Treasury

Before joining Treasury in 1993, Donaldson studied at the University of Stellenbosch, Unisa and Cambridge University; he taught economics at the former University of Transkei, Rhodes University and the University of the Witwatersrand.

According to an OECD resume of Donaldson, he oversaw Treasury’s work on spending policy, social development and public service delivery, and has played a leading role in the reform of the budget process and reshaping of budget documentation.

“He contributed to the work of the Katz Commission on tax policy, served on the Committee of Inquiry into a National Health Insurance System, was a member of the team that drafted the 1996 macroeconomic strategy and (was) involved in the Interdepartmental Task Team on Social Security and Retirement Reform.

“He (was) a former member of the Board of Directors of the South African National Roads Agency and the Board of Trustees of the Government Employees’ Pension Fund.”

Donaldson looks back at challenges and achievements

Looking back at his most rewarding and exciting time at Treasury, Donaldson recalls putting together the country’s first medium-term budget policy statement in 1997, when National Treasury worked to create a more integrated planning system for government’s spending agenda.

“We built a budgetary system based on the Constitution – it was an exciting time,” he said. “It has evolved and changed a lot since 20 years ago.”

His most challenging experiences were engaging with other governmental departments, a key role as head of public finance.

“In the last 20 years, Treasury has strengthened its capacity to engage with other departments and parastatals and development finance institutions,” he said.

However, he said it was challenging building these relationships, especially with regards to developing the country’s social security and national insurance policies.

“There is a lot more to do,” he said.

With regards to NHI plans, he said there is interesting piloting going on, but said these are “massive, long-term reforms – I hope to keep engaging with these. I hope to get more time to work on it”.

“I was also involved in establishing Treasury’s Jobs Fund, and other employment initiatives, which are our country’s biggest policy challenges. We have learnt very interesting things, especially with partnerships with the private sector.”

Treasury challenges are shifting

Donaldson believes Treasury’s challenges are shifting. “The coordination with other departments and municipalities, as well as of its own team, is becoming more important.”

In addition, its ability to coordinate growth plans with business and labour is equally important.

“The initiative of Treasury working with the business sector and unions got under way 18 months ago,” he said.

“You can’t develop and grow the economy as the state alone. This needs in-depth cooperation with other stakeholders, including national, regional and local initiatives.”  

Donaldson believes the engagements will get going again, following Business Leadership SA and the CEO Initiative’s reluctance to work with new Finance Minster Malusi Gigaba.

“There will be different forums and stakeholders working together,” he said. “There is no other way forward. Gigaba has said he will engage with business and labour leaders.

“It’s ongoing work that goes beyond the World Economic Forum and other major meetings – it’s what happens in between them,” he said. “We need on-oing formal institutional engagement with stakeholders.”  

Treasury staff to stick it out - economist

Nomura economist Peter Montalto said on Tuesday that it seems National Treasury staff “are clear they will stick out the transition as long as they can”.

“A new director general from this month should help after the departure of Lungisa Fuzile. We now expect an internal candidate – the best possible one – to become the new director general.

“We think there has likely been a realisation that appointing externally is too risky a move. Such an appointment would be seen as a positive by markets.”

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