On Tuesday, Deputy President David Mabuza was dismissive of tweets by Tito Mboweni, saying what the finance minister tweets are his own views, not of those of government.
This despite the fact that Mboweni is praised by financial markets and lenders, particularly because his credibility was earned through his commitment to monetary discipline and the inflation-targeting framework during his reign as Reserve Bank governor, and also because of his more recent willingness to serve after the economy had been mismanaged by the ANC under Jacob Zuma.
Mabuza’s comments have stimulated a debate about the role of the finance minister and his relationship to the governing party, and global and SA lenders in general.
Before going on to that discussion, allow me to digress to the Public Investment Corporation (PIC) Amendment Bill and the reactions of the portfolio committee to the recent letter from Mboweni. In the letter, the finance minister asked the committee to halt its work on the bill, citing two reasons. One is his concern as to whether a political office-bearer should chair the PIC board, as is currently the case, with the deputy minister of finance automatically appointed to that role.
The second was more a request from retired judge Lex Mpati, who is chairing a commission of inquiry into the PIC’s affairs. The judge wants this process concluded in order to incorporate his recommendations into parliamentary deliberations on the bill.
The committee was quick to react by claiming independence from the executive. How many South Africans would wish the same approach would have prevailed in the Robert McBride battle with the police minister, as well as for the former public protector’s report on Nkandla.
Sometimes in the environment SA finds itself, where the putrefaction of corruption invades every inch of the land, reading, listening and engaging is priceless.
At the centre of Mboweni’s belated intervention is a concern about governance at the PIC, particularly on the appointment of a politician as the chairman of the board.
What is emerging in various commissions is the amenability of politicians to maximising self-interest through the sacrifice of their fiduciary duty. The various laws that seek to deracialise the economy are susceptible to abuse and as such require a review to close the loops that result in the asymmetry of information.
In improving governance at the PIC, the chair’s role needs to be reviewed to allow the finance minister to appoint an outsider, someone capable of bringing independence to the board of directors. The board should represent all stakeholders, including trade unions, while being dominated by independent nonexecutive directors.
The new dawn that President Cyril Ramaphosa is alluding to is about learning from state capture and how ANC political deployees have had a hand in the collapse of state-owned companies.
It must be noted that former politicians are likely to be under pressure to return favours. Mohammed Valli Moosa was the chairman of Eskom when Hitachi, with the ANC’s investment arm Chancellor House as its partner, was awarded a contract; Ben Ngubane’s name has come up at the SABC and Eskom. Both those institutions are in financial distress, indicating poor governance had a role to play in their failures.
As the finance minister, Mboweni can account for all the losses the party’s gambling on politicians has cost the country. Financial prudence and fiscal accountability requires him to act and I can only wish that the committee would have applied its mind, rather than deferring the matter to the next parliament.
The deputy president seems to be in helter-skelter mode regarding the finance function and the role of the finance minister in a country that is heavily indebted, and whose government is at the centre of mismanaging the country’s resources.
The dearth of economic competence within the governing ANC is regrettable. Despite attempts by Reserve Bank governor Lesetja Kganyago to clarify the bank’s constitutional mandate, there appears to be different messaging from the ANC, which has reiterated the decision taken at its 54th conference to nationalise the bank. Many lenders have praised Ramaphosa, Mboweni and Kganyago, and take note of what they say because of their credibility, competence and commitment to create a better society for all.
You do not have to agree with what they tweet, but you have to recognise that their tweets serve SA’s economic interest. These three gentlemen, who manage our sovereign risk, hoist our flag high everywhere they go, and I am proud of them.
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