Ferial Haffajee: Inside Trevor Manuel’s notes to a new finance minister | Fin24
 
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Ferial Haffajee: Inside Trevor Manuel’s notes to a new finance minister

Oct 11 2018 12:24
Ferial Haffajee

An internal document describing the work of a Finance Minister provides unprecedented insight into what awaits Tito Mboweni as the newly minted office-holder.

Written by South Africa’s longest-serving Finance Minister Trevor Manuel, and lodged with the Zondo Commission of inquiry by Nhlanhla Nene when he testified last week, it sets out the role of a portfolio Manuel describes as " different from all others".

Manuel wrote it when he handed over the role to former Finance Minister Pravin Gordhan, but it is still apposite with a new minister in the seat.

Although I’ve covered the portfolio for a long time, I had not realised how complex and wide-ranging it is, and why Mboweni had to be persuaded to take it when Nene’s shock resignation left President Cyril Ramaphosa with a crater-sized hole in his Cabinet.

Not only is the Finance Minister responsible for the budget, but he (there hasn’t yet been a she) also oversees 10 other entities.

These are the South African Revenue Service, the Financial Intelligence Centre, Registrar of Banks, the Land Bank, Financial Services Board, the Development Bank of SA, the Accounting Standards Board, the Co-operative Banks Development Agency, the Land Bank and the Public Investment Corporation.

In addition, there are regular meetings with the SA Reserve Bank on monetary policy, a series of international financial and economic relations; and the Treasury has oversight over all public enterprises.

Manuel wrote: "Even in the best of economic times – and these are not the best of times – being the Minister of Finance means playing a role in government that will not always lead to unqualified popularity."

Last week, Nene told the Zondo Commission of Inquiry that Finance Ministers were also called " Mr. No's" because they so often had to decline spending requests.

It is why Nene got into such deep trouble with former President Jacob Zuma – who eventually axed him in December 2015 when he said "no" once too often – that time to a R1-trillion nuclear deal which would have bankrupted South Africa.

Manuel’s handover note counselled that "[t]he Minister of Finance must advise Cabinet about what is affordable, and just as controversially, must recommend which of the contending priorities needs immediate resourcing and might have to wait.

"Inevitably, this means that Minister of Finance is sometimes cast in the role of an obstructionist or scrooge, and becomes the obvious target for blame if and when delivery agencies appear to fall short of their aims and objectives."

The Minister is also the "face" of the South African economy, and it is his or her responsibility often to "sell" the viability and attractiveness of the economy to ratings agencies, investors and other constituencies, says Manuel.

So the job has internal and external roles: a lot of the Minister’s time is spent in global institutions from the IMF and World Bank to continental bodies like the African Development Bank, the African Union and the Southern African Development Community (SADC).

The minister, with the support of Treasury, sets tax policy and oversees the SA Revenue Service. "This is not an absolutely straightforward task: despite the fact that people complain about the quality of public services, no taxpayer anywhere in the world relishes paying their taxes. Even before one thinks about the challenges presented by those seeking to profit by gaming the tax system, the free-rider problem among taxpayers is immense. Everywhere in the world, people attempt to minimise, defer, avoid and evade their tax obligations."

Finance minister notes

With SARS on the ropes and under-collecting, this oversight is likely to take up a substantial part of Mboweni’s time. One reason the Treasury has been able to withstand regular changes of minister in the past three years (five ministers have walked through the revolving doors – Nene twice) is because its term of officials is rock-solid.

In the final lines of his handover letter, Manuel wrote: "I invite you to enjoy this wonderful opportunity to work with some of the nation’s finest minds, who are also exceedingly committed public servants focused on the task of improving the quality of life of the majority of South Africans. I advise that they are often strong-willed and opinionated – it is this which makes the assignment so wonderfully challenging."

Those committed public servants of the Treasury have saved South Africa more troubles than we can tally, and they will be Mboweni’s secret ammunition as he starts a challenging term.

* Update: This article previously stated that the finance minister oversees StatsSA. StatsSA is now overseen by the Department of Planning, Monitoring and Evaluation.

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