South African Finance Minister Malusi Gigaba speaks during a breakfast conversation on Thursday, the day after his medium-term budget speech in Parliament. PHOTO: David Ritchie/ANA PHOTO

In The News Opinion South Africa

Gigaba’s MTPBS address confirms SA has a Minister of Finance for today and the future!

It is time to leave the trenches of self-interest and work to change the economy

 

The Finance Minister Malusi Gigaba delivered his maiden medium term policy budget statement (MTPBS). It was indeed a nakedly honest assessment of where SA’s economy finds itself. As Gigaba spoke, the rand slipped and this was taken as market reactions to his address. We have sat through many MTPBS addresses before, the picture was seldom rosy, and a great part of this has to do with the confirmed tardy growth in our economy.

 

Gigaba informed us that SA has a short fall of R50.8bn. Regardless to how and where one may choose to stand in political or party conviction, this makes for a grim picture. He also announced that the anticipated growth of 1,3% as forecasted by his predecessor Gordhan in the February 2017 is scaled down to 0,7%. Gigaba thus confirming an honest reality check of where SA finds itself. South Africa remains in a technical recession for the better part of 2017, with the rating agencies downgrading SA and an economic growth outlook that remains bleak.

 

As soon as the MTPBS was delivered one of the dominant rating agencies FITCH announced that this address does not inspire confidence, we must wait and see what this means from the questionable rating agencies who have come to insert their role in the domestic SA politics.

 

Gigaba’s address may not have solved the longstanding challenges of tardy economic growth, yet it did not attempt to deceive us in hiding the problems we are confronted with. His honesty with us as South Africans must be applauded in this his ‘vuurdoop’ (baptism). I am no economist and will not pretend to be one; I want to raise the issue of perception and what his address at another level may mean.

 

South Africa is and remains a divided society on many fronts, our divisions, created, orchestrated essentially anchored in pure self-interest often militates against our required intent of working for the collective greater good. It also denies us the opportunity to suspend our trenched frames labelled or real, to work for that bigger reality beyond us.

 

I listened to Gigaba and realised we may only speculate if any other minister regardless to whom would have been able to deliver a more sober MTPBS or a more rosy picture. A great part of our politics comes wrapped in a need to prove we better, trustworthier, and more informed than others. We have this tangible contest with ourselves, where some out of their previous roles want to act as the messiahs for the redemption of the economy. They see not their own errors and contribution to the crisis we are dealing with in economic sense.

 

What Gigaba’s address did was to confirm again it takes no rocket science to be a finance minister. I am not in attempt of demeaning the position I am attempting to argue it was not about financial education or economic education skills, as Manuel and Gordhan the latter a pharmacist by profession has shown. Gigaba therefore stands in that tradition of non-financial and non-economists training, perhaps now a tradition in democratic SA with the exception of Nhlanhla Nene who is formally studied economics.

 

Gigaba’s appointment confirms that you need someone willing to do the job and willing to learn as the case with most professions. His maiden address therefore unequivocally helps us appreciate that finance ministers need not have the qualifications immanent in designations of economists or financial gurus, but people with a grasp for the basics and a capacity to learn.

 

Gigaba’s address also confirms the power of perception and sentiment as key sojourner of the democratic SA. That perception unfortunately is not free from the discredited enterprise of race. We know that the markets have always reacted negatively to every appointment of a finance minister in democracy. May I add the appointments from Manuel to Gigaba constitute people apartheid defined as black? Thus a perception of black led finance ministry is never easily embraced in a world where the identity of white rule and dominates the economy and markets. We conveniently forget how the apartheid oriented markets reacted when Trevor Manuel was appointed to this office, juxtaposed to that to 2008 when he tendered in principle his resignation, how the markets reacted. We also forget how the markets reacted when Gordhan was appointed at first and subsequently.

 

The falling of the rand while Gigaba delivered his address is not to be understood devoid of the polluted political world we find ourselves in. I would have been surprised if the rand did not react negatively; we know that markets are manipulated based on perceptions so one would have thought an honest reality check would inspire confidence, yet we find telling the truth in this instance opens one for punishment. We must however continue to tell the truth regardless, it is it in acknowledging in truthfulness where we are that we may find the courage to work for the future we all should dream for SA.

 

What is undeniable is we are in a brutal political contest with an upcoming 54th ANC elective conference as epicentre; this has pitted one group in the ANC against the other. This contestation is not free from self-interest either. The group that has former minister Gordhan as its preferred finance minister has the endorsement of the international  ‘market’. The rating agencies makes up part of that international world, and have previously shown us where their political interest and loyalty lay, when they at the time of Gordhan’s firing rallied in support of him and downgraded SA as an investment destiny. This group therefore has no interest in seeing an SA grow under someone they have labelled a stooge for their archenemy namely a sitting president. Gigaba therefore will need time to convince this group, if he ever will because the stakes are so high in an ANC elective season.

 

Gigaba’s address also provides business and labour ample opportunity to come to the table in assisting the structural changes needed to this economy. Economic growth and ultimately job creation cannot happen in a vacuum, but needs the fundamental commitment, undeniable decision-making, and a staying power to do more than talk. Business professes to be the watchdog on corruption yet it fails to engage its own corruption. It refuses to engage the structural realities and disparities of and SA economy in untransformed frame and gravitates to maintaining the status quo regardless to how it does not work for the greater majority of South Africans. Labour continues to demand and blame the government yet it fails to lead in engaging on actual structural reform of the economy to work for the greater majority of SA citizens. There are roles for government, business, and labour in their distinctive descriptions and the crisis of the hour presents that opportunity to work for change.

 

Those who have a political interest in him failing, view Gigaba on another level in a sceptical sense. Their interest to see him fail is also the desire to see SA fail. These makes up a cohort of interest groups and role players internal and external to the ANC, which also includes among others opposition parties.

 

Gigaba’s address in soberness of reflection necessitates the burden of change of an economy in crisis. Our trenched and divided politics render us confronted yet unwilling to ask the tough questions of what does that change mean and what will be our respective roles in that required change. A South African economy that is stubborn in not showing growth, and notorious for its truculence in job creation cannot be the fault of one group, one person, one party as our narrative often leads. What are the things we must do, and who must do what, is what we should be concerned with. We cannot ask these self-introspection questions from our makeshift comfort of trenches, we must leave the trenches and become vulnerable to engage each other honestly. Gigaba poignantly states we must plant the seeds we want to harvest.

 

Gigaba as finance minister having given us his 14 point-plan a few months ago and now this MTBS, which equally shows some of the points delivered on tells us we have outlived the claim that the SA treasury is only to be trusted in the hands of Gordhan. Regardless to what may happen tomorrow, Gigaba is on track and must get the support from all role players to lead treasury and the SA economy through this arduous period to sprout growth and ultimately a harvest of job creation and more sharing a transformed SA economy.

 

This bad economic situation thus presents vast opportunities if we are willing to leave our trenches, self interest, holier than thou attitudes and show a willingness to put South Africa first. We may sit and talk how bad it is or we may rise from our trenches and say what is laying ahead.

 

In Gigaba we have a finance minister who is willing to be honest; our solution is not another minister, but a conscious choice to work for the better we so easily claim.

 

Political commentator Clyde Ramalaine. PICTURE: Supplied

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