FERIAL HAFFAJEE: SA's soup of seven 'finance ministers' spoils the broth | Fin24
 
  • Going down

    ‘Massive’ fuel price drop on the cards for December - AA

  • Good neighbours

    Zimbabwe must be supported, Ramaphosa has told a meeting of EU leaders

  • Postbank

    The state bank in the making has singled out customers at the bottom of the pyramid

Loading...

FERIAL HAFFAJEE: SA's soup of seven 'finance ministers' spoils the broth

Sep 13 2018 07:54
Ferial Haffajee

Things fall apart when the centre cannot hold and for a president who sailed to power on a promise to fix the economy, Cyril Ramaphosa is not doing well.

One reason may be that South Africa has too many finance ministers. I know there’s only one official politician who holds the title and that's Nhlanhla Nene, but the message gets confusing because there are too many centres claiming the mantle of authority over economic policy.

When he was running for ANC president, it looked like Ramaphosa would make himself the centre of economic policy-making. He published a 'new deal' document with a set of sensible growth and employment-focused policies that you would have expected to become the heart of economic policy once he was inaugurated as president in that heart-warming moment in February. 

Many presidents assume the mantle of economic policy czar if they inherit administrations of tepid growth and low employment. If Ramaphosa had made his presidency that centre, we would be in steadier times. But he has not and instead there is policy mayhem. 

Too many cooks 

Consider all our finance ministers. There is Nene who runs the budget but not policy. He has announced a set of economic stimulus measures but has not been able to say what these might be, because National Treasury is no longer the heart that sets the country's economic policy beat. 

Whereas former President Thabo Mbeki had a strong economic policy bent, he deferred authority to his Finance Minister Trevor Manuel, South Africa’s longest serving official in that role. 

By appointing four so-called 'investment lions' in April, Ramaphosa signalled a foreign investment-led growth strategy. But Nene’s growth strategy is domestic stimulus-led. I know these two policy outlooks can work together, but there is a glaring absence of clarity.

Over at Luthuli House, Enoch Godongwana heads the governing party’s economic transformation committee, an oxymoron of a political title if ever there was one because none of its ideas has managed to grow or transform the economy. 

Still, this powerful committee holds supra authority over economic policy because South Africa is a party-based system of political power, which makes Godongwana a de facto finance minister.   

He has put out a separate set of economic stimulus ideas at odds with those set out in Ramaphosa’s New Deal which you assume the President still believes in. 

Godongwana and his committee’s key idea is an infrastructure growth spending model but, again, it’s at odds with a budget so deeply in the red the country is threatened with a downgrade. 

Public Enterprises Minister Pravin Gordhan is staging a heroic battle against chronically corrupt and credit-heavy parastatals. He’s knee-deep in the clean-up, but if you look at policy positions emerging from the department and the party, there's still a belief that state-owned enterprises can drive growth. Parastatals are a huge liability for the fiscus and so Gordhan’s view that they can still be growth drivers exerts wider policy-setting influence.

As Minister of Economic Development, Ebrahim Patel is shepherding a competition amendment bill through Parliament that is intended to open up a highly concentrated economy. But if it’s not well-scheduled with other policy shifts, it can add to an uncertain policy environment.  

As chairperson of the ANC and the Minister of Mineral Resources, Gwede Mantashe also has economic policy and political influence. He has missed the deadline set by Ramaphosa for the safe passage of a revised Mining Charter, and last month waded into the land debate by setting an arbitrary maximum farm size of 12 000 hectares as the limit for private ownership.  You could almost hear property prices tumble after he spoke. Meanwhile mining is again in the doldrums. 

By my count, the ANC alone has six politicians making different economic policy signals. Add the influence of EFF President Julius Malema, and it makes seven. 

It’s no secret that Ramaphosa was responding to Malema when he made the shocker of an announcement on land expropriation without compensation at two minutes to midnight on July 31. 

While some say the jury’s still out on whether or not that tipped the country into recession last week, it’s now clear that Ramaphosa is sensitive to and influenced by the young radical’s soapbox, which makes Malema’s South Africa’s seventh de facto finance minister.   

As the millennials say: issa too much!     

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Follow Fin24 on Twitter and Facebook. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Would you switch to a bank that rewarded you for 'good' financial behaviour?

Previous results · Suggest a vote

Loading...