Reducing the size of Cabinet was necessary, but now the real work to turn around the economy begins.
That was the general sentiment from various industry and business organisations as well as civil groups who weighed in on President Cyril Ramaphosa’s leaner Cabinet.
Earlier on Thursday in Pretoria, the newly-appointed ministers were sworn in following Ramaphosa’s Cabinet announcement on Wednesday evening which outlined the structure of the new national executive. During the announcement, Ramaphosa said the number of ministries had been reduced from 36 to 28.
Commenting on the smaller cabinet, the Banking Association of South Africa (BASA) said this was just the first step and efforts should also be made to reduce the public sector wage bill and other wasteful expenditure.
“Despite the reduction in the number of ministries, the size of the executive, including deputy ministers, remains unreasonably high, with many who failed to distinguish themselves over the last 10 years,” the association said in a statement issued on Thursday.
“The cabinet must unite behind a common vision and strategy for inclusive economic growth,” BASA said.
BASA welcomed the reappointment of Tito Mboweni as finance minister and stressed it was necessary for him to restore public confidence in Treasury. “Restoring the credibility of the National Treasury in the eyes of the investment community and other government departments will require much more ‘hands-on’ engagement by the minster,” BASA said.
Similarly, Mboweni’s deputy Dr David Masondo will also have to “work hard” to win “trust and confidence” of South Africans in his ability to handle public finances. “It may well fall to him to sort out the corporate governance failures at the Public Investment Corporation, which manages the retirement savings of public servants,” BASA said.
No time for Eskom
The banking association also had strict instructions for Public Enterprises Minister Pravin Gordhan, noting that the minister had made little progress in resolving the challenges at Eskom. “There is no time left for patience and studying and understanding the problems at Eskom, when much of this work has already been done, and every day increases the company’s debt burden and operational inefficiencies,” BASA said.
Banks are willing to support public enterprises, but there needs to be a sustainable business case, BASA explained. “Banks cannot be expected to risk the money of their customers on unsustainable companies to which the state is ideologically committed.”
BASA also warned Minister of Trade and Industry Ebrahim Patel, charged with facilitating growth of business and investment, not to deal with “poor policy enforcement” by piling on more regulation which causes policy uncertainty.
The South African Federation of Trade Unions (Saftu) also said the reduction in the size of the Cabinet was insufficient while the Labour Federation raised concerns that Ramaphosa had retained Public Enterprises Minister Pravin Gordhan. This after Public Protector Busisiwe Mkhwebane found that he acted unconstitutionally in handling the early retirement of former SARS deputy commissioner Ivan Pillay. Gordhan was finance minister at the time. The minister is challenging Mkhwebane’s findings by seeking a court review to have it set aside, Fin24 previously reported.
“We expected that the president would at least acknowledge that the public protector has made negative findings against Minister Pravin Gordhan and explain why he decided not to act in line with the directives of the office of the public protector,” Saftu said.
Business Unity South Africa (BUSA) has welcomed the continuity of leadership in Treasury and the public enterprises department.
“The organisation expects this to signal that the government will make good on its promise to pursue a path of fiscal consolidation, address the state wage bill and hit the ground running on the work of getting SA Inc back on a growth path,” the organisation said in a statement issued on Thursday.
The organisation will also be looking to see progress in terms of state-owned enterprises which remained “a great risk” to public finances.
“Now, the focus must shift towards implementation and bolstering of capacity in the various departments… The organisation will be seeking urgent engagements with ministers in the economic cluster to determine aligned actions,” BUSA said.
The Organisation Undoing Tax Abuse (OUTA) is also of the view that Ramaphosa’s new cabinet will have to work on putting the country on a positive path. “Now that the new Cabinet has finally been appointed, the hard work of rebuilding South Africa begins,” OUTA said.
Commenting on the size of the Cabinet, the organisation would have liked to see the number of deputy ministers reduced. “We would have hoped for an equal reduction in the number of deputy ministers. Nonetheless, the real test for financial stability will be in focused oversight of the departments,” OUTA said.
The organisation also welcomed the retaining of Mboweni and Gordhan, but is curious to see what new Transport Minister Fikile Mbalula will do to address e-tolls.
“Since 2008 South Africa has had seven transport ministers, none of whom have been able to deal with some of the most pressing transport issues. The first issue OUTA is calling on Minister Mbalula to address is the e-toll debacle,” the organisation said. “By pulling the plug on this failed scheme the minister will show his commitment to dealing with irrational decisions that have haunted this department in the past,” OUTA suggested.