Duncan Pieterse has emerged as the likely contender to take over as Treasury director-general, with the market welcoming the choice of a credible and well-respected official.
The cabinet is expected soon to approve the appointment of Pieterse, who now is deputy director-general in charge of asset and liability management, which oversees the issuance and marketing of sovereign debt and the finances of state-owned enterprises.
Pieterse headed the Treasury’s economic policy portfolio before he took over at asset and liability almost two years ago — a portfolio also held by highly regarded Treasury directors-general Lesetja Kganyago (now Reserve Bank governor) and Lungisa Fuzile (now Standard Bank SA CEO).
The appointment of a new director-general comes more than a year after Dondo Mogajane decided not to extend his contract when it expired in June 2022. Mogajane has since joined the Moti Group as CEO. Treasury veteran Ismail Momoniat has been acting as director-general in the interim.
The choice of a new director-general follows a lengthy recruitment process of external and internal candidates. It is understood there were few, if any, suitable candidates from outside the public sector, as few private sector executives with the appropriate experience were willing to join the public sector.
Pieterse has emerged as by far the most impressive internal candidate, though sources say he had to be persuaded to take the job. There are concerns, too, about a new head for the asset and liability management post.
The new Treasury chief will take office at a challenging time, with SA’s public finances rapidly deteriorating and the complex Eskom debt transfer process still to be completed.
The complexities and politics involved in negotiating policy and budgets with the rest of the government make this post a particularly tough one.
“Duncan Pieterse is well regarded by the private sector and will bring credibility and skill to the director-general position. As such, this appointment will be welcomed by the market. That said, he will have to don a political hat more explicitly given that the director-general’s role is much more than merely being a technocrat,” Terebinth Capital’s Carmen Nel said.
“What the market will be looking at closely is continuity within the asset and liability team and whether this shift in the National Treasury will impact on the funding strategy, which is crucial given renewed fiscal pressures in the lead-up to the medium-term budget [statement],” Nel said.
Citi economist Gina Schoeman said Pieterse would be well placed as director-general given his experience across departments, particularly assets and liabilities, which “has been a particularly difficult department to manage given volatile foreign exchange and bond markets, a solution of some sort for Eskom’s debt, not to mention the density of local politics”.
Schoeman said: “Duncan is articulate and transparent, and particularly concerned about the confidence of bond investors.”
Goldman Sachs economist Andrew Matheny said Pieterse “has definitely built up his credibility — in particular with regard to the way the Treasury approached Eskom — and his communications with the market in the lead-up to the Eskom debt transfer announcement in February’s budget.
“He had been guiding this to the market all along, but nobody believed it until it happened and it came as a positive surprise.”
Some in the market have criticised the Treasury’s debt management for being too conservative because of its focus on keeping the average maturity of SA’s debt very long (almost 12 years) and its reluctance to issue more short-dated debt.
Matheny said: “Duncan has taken some of the criticism on board and though he hasn’t rocked the boat, the Treasury has started to issue more short-dated debt, such as treasury bills and last year successfully rolled out floating rate notes.”
In response to questions, the Treasury said on Monday: “The appointment process is still under way.”
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