POLITICS

MTBPS: Cabinet Chaos Costs Gigaba His 14-Point Growth Plan

The imperatives of state capture and the domino effect of Zuma's serial reshuffles create instability and chaos in government and the result is clear.

24/10/2017 06:06 SAST | Updated 25/10/2017 06:47 SAST
Bloomberg via Getty Images
Photographer: Andrew Harrer/Bloomberg via Getty Images

By HuffPost SA's count, Finance Minister Malusi Gigaba has achieved three of the goals he set himself and missed eight. But this can be placed at the door of Cabinet chaos rather than the minister's failure.

In July, Gigaba released a 14-point growth stimulus plan when the economy was in recession. HuffPost SA has only calculated the goals the minister set himself to achieve by Wednesday's tabling of the mini-budget in Parliament.

The July plan was the skeleton on which the young minister promised to put the meat on this Wednesday when he tables his first medium-term budget policy statement.

President Jacob Zuma monitors and coordinates the implementation of the economic rescue plan, but the embattled head of state has not made a significant economic speech in months.

Theuns Kruger/Graphics24

Gigaba's good news

Let's start with the good news. At the eleventh hour earlier this month, Gigaba staved off a crash-landing for SAA when he secured a R5-billion bailout for the airline using the National Revenue Fund.

Last week, he cleaned out the SAA board, removing Zuma's crony Dudu Myeni and putting the respected business leader JB Magwaza in his place.

Myeni's deputy, Tryphosa Ramano (who was handpicked by former finance minister Pravin Gordhan for the role), is gone too and has been replaced by Nolitha Fakude, a seasoned and wise business leader.

He has bolstered the board of the national carrier with veteran business leaders. The other big tick off his to-do list was to secure an inquiry into data prices by the Competition Commission.

Data prices are one of the most popular bugbears of South Africa's smartphone-owning multitudes and the topic cuts across fissures of race and class.

Minister misses the mark

The rest of the goals Gigaba set himself to achieve in the very short term (between July and today) have largely not been met. This is because parts of Cabinet are in turmoil with numerous commissions of inquiry into state capture at state-owned enterprises (SOEs).

Most of the promises Gigaba made related to improving governance at the SOEs, which are so indebted and badly run that they have pushed up Treasury's contingent liability so high that an unsustainable budget deficit now threatens the economy.

Public Enterprises Minister Lynne Brown, who was responsible for many of the items meant to have been achieved in Gigaba's growth plan, has been involved in tamping down serial scandals and crises at Eskom.

At the department of public service and administration, the minister in charge, Faith Muthambi, is in a civil war with her bureaucracy. The minister has suspended her director-general and a number of senior officials amid allegations of nepotism -- Muthambi is alleged to have hired a number of family members, although she denies this.

The result is that she has made almost zero progress by the start of the public service wage round that started this week. Public service trade unions, the most powerful in the country, have tabled a demand for increases ranging between 10 percent and 12 percent, while government has budgeted for 7 percent, which economists believe will widen the budget deficit to a yawning 4.1 percent or higher.

Over at the communications ministry, Zuma installed his eighth minister since becoming president in 2009.

This will have the knock-on effect of delaying the allocation and licensing of spectrum to enable the growth of faster and cheaper data.

Counting the costs of capture

In other areas on which Gigaba depends for achieving his goals, special interests related to patronage networks will bedevil his progress as they serve their own rather than a public interest.

In the sphere of energy, for example, while Gigaba's plan seeks to delay an economically disastrous nuclear deal, the new Energy Minister David Mahlobo is gung-ho on getting it going. The Post Bank, which can take over the payment of social grants from an expensive and scandal-prone private sector provider, is being stymied. This is because crony interests at the ministry and department of social development -- as well as at the payment agency, Sassa -- will lose significant cash flow if the Post Bank gets the grant-payment deal.

The imperatives of state capture and the domino effect of Zuma's serial reshuffles create instability and chaos in government and the result is clear in the assessment of how little progress Gigaba has been able to make after tabling his emergency 14-point plan in July.