The finance minister faces the classic dilemma of dealing with the urgent versus the strategic. It’s urgent that he replace Dondo Mogajane, the National Treasury’s outgoing director-general. But the choice of a new director-general would have been better done with greater clarity of what kind of an institution a Treasury of the future should be, and what kind of people it should hire.
That’s why who becomes the next director-general matters. Appointing a candidate who may tick all the usual technical requirements runs the risk of delaying, if not kicking down the road, the rebuilding or remake of the most crucial of government departments.
The Treasury hasn’t changed much structurally since the days of Trevor Manuel, who exercised political oversight over the institution for 13 years. Yet the political environment within which the Treasury has had to operate has changed a lot. In addition, after 13 years under stable political leadership, the Treasury has hosted eight ministers (including Pravin Gordhan, Nhlanhla Nene’s two terms and Des van Rooyen’s brief tenure) during the past 12 years.
The changed political environment matters because a lot of the Treasury’s functions are more facilitative than about barking orders to the rest of government. This therefore demands that the Treasury’s men and women have the standing to “persuade” their colleagues in government. Of course, at times persuasion is most effective when a man’s most vulnerable parts are squeezed.
The Treasury’s standing has been chiselled down over the years, by both internal and external factors, leaving the institution sapped of the strength it once had. Internal factors include the normal wear and tear all institutions face. For example, many Treasury officials have moved on over the years. That’s for various reasons, including retirement and what may be called “push factors”. The wear and tear has no doubt been worsened by external factors, the most important of which was the state-capture project, the details of which have been documented by the Zondo commission.
There are three good examples of the institution’s wear and tear. One is the post of the accountant-general, whose key role is to enforce generally accepted accounting standards and transparency across the state. The office hasn’t recovered since Freeman Nomvalo, the most high-profile incumbent, left in 2013.
Then there is the office of the chief procurement officer, a crucial post given that procurement continues to be seen by thieves as low-hanging fruit. But in retrospect, the post was created in great haste and therefore became a difficult assignment. Kenneth Brown, its first head, did the best he could, marching the office forward more through sheer force of character and his many years of standing in the Treasury and government. But long-lasting institutions aren’t built that way.
The third is the financial sector and tax policy division, which has been led by Ismail Momoniat for more than 16 years. The division is key because it is responsible for drafting the policies that govern the country’s financial sector, a major pillar of the SA economy. It is also responsible for tax policy, whose importance cannot be overstated because it not only determines whether the government has money but can affect investment and ultimately economic growth.
Affectionately known as Momo, Ismail is due to retire. Given the time he has been head of the division and the extensive financial sector and tax policy network he has built locally and internationally, Momo’s shoes will be hard to fill. Some of this difficulty will be mitigated by the fact that these relationships are institutional in nature. However, the human factor matters too. The division has also lost some senior officials to other state institutions in recent years.
All of this brings us back to the question of why the people who work for the Treasury, and the institution’s standing, matter. This was best captured by the handover report Manuel prepared for his successor in 2009. This noted that the language in which the Treasury’s statutory functions are framed “tends to come from the more facilitative end of the spectrum”. The only exceptions are the Treasury’s responsibility in enforcing transparency and effectiveness in the use of resources.
The facilitative role is despite the Treasury’s reputation “for appropriating excessive powers”. The truth, according to the handover report, is that in relation to most of the policy questions in which the Treasury plays a role, “it does not have a free hand”.
That being the case, an institution that relies mainly on persuasion (which is what the facilitative role is about) to get things done must have men and women of sufficient standing within and outside government if it is to succeed in carrying out its functions.
• Sikhakhane, a former spokesperson for the finance minister, National Treasury and SA Reserve Bank, is editor of The Conversation Africa. He writes in his personal capacity.
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