For Mboweni's growth plan to succeed the ANC has to give up certain dogmatic positions that were formulated when 7% growth was the status quo, writes Adriaan Basson.
Finance Minister Tito Mboweni walks with members of the Treasury to deliver his mini budget speech. (Rodger Bosch/AFP)
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Tito Mboweni's maiden speech as finance
minister might as well have begun, "call me Tito". At times
avuncular, at times swaggering, Mboweni played the man who has come in to clean
up a mess after the original cleaners turned out to be the mess. And he played
it like he was born for the job.
At his most broad shouldered, Mboweni was an
ex-soldier calling in army generals to drain and plug the Vaal River System
crisis. He even told Parliament that the president had reported back to him,
Mboweni, to say that he, the president, would be looking into the matter
further just in case. And then, as a kind uncle, he announced the VAT
zero-rating of sanitary pads after reading a tweet straight from the people.
Mboweni was anything but monotonous.
He spoke with a candid frustration at poor
government that has been missing from Cabinet. When he said "[n]obody
should learn in a school that is unsafe" he went off-script and made it
clear to whom he was speaking … "madame minister of basic education".
When addressing the R23bn debt to service
providers, he did not plead poverty on their behalf. "In many cases"
he said, "the financial challenges faced by municipalities are a
reflection of weaknesses in governance, or even fraud and outright corruption".
He plugged in the decrepit Modimolle-Mookgophong (formerly Nylstroom) example
He is unapologetically in favour of market
solutions to a broad range of social problems. "Too often, government
spends money on infrastructure when it could be better and more effectively
done by the private sector." After announcing a plan to tilt the balance
away from an overreaching government, there was meek applause – so Mboweni gave
the National Assembly a lite slap. "You are supposed to clap a bit harder"
at the chance to get out the way of good business, he said, pleading for Parliament
to at least pretend they have faith in the work of ordinary South Africans.
Mboweni frequently used repetition to drive
home particularly painful messages to the ANC-led government. The longest pause
between repetitions came when he said the "2018 public-service wage
agreement exceeds budgeted baselines by about R30.2bn over the medium term... We
have not allocated additional money for this". In other words, the
salaries are R30bn above the ceiling and the ceiling ain't goin' up, so deal.
Mboweni also made it perfectly clear that his
interpretation of the governor of the SA Reserve Bank's (SARB) mandate is to
keep inflation "low and stable", and told the National Assembly to
stop trying to "distract" SARB by threatening its full independence.
Mboweni's own mandate is to "strengthen the fiscus". No mention of "transformation"
in either regard or anywhere in the speech.
When it comes to the most debated policy of
2018, property expropriation without compensation, there was another round of
silence. (Ramaphosa has long stopped promising that expropriation without compensation
will boost the economy). Instead, Mboweni promised the extension of soft loans
to farmers, through the Land Bank, worth R16.2bn over the next 3 to 5 years
with an emphasis on "export-oriented crops that are highly labour
intensive", like avocados. A good idea buttered up with a bit of Mboweni
swagger; he's an avocado farmer himself.
So much for style. The substance is less
well-rounded. Mboweni promised that when it comes to loss-making state-owned
enterprises there "should be no holy cows!" He said this in the
direct context of SAA, to screams from the opposition: "Sell it!" He
then followed up by explaining that in the 2018/2019 financial year the state
will once again "provide additional funding" for the unholiest of SA's
haemorrhaging holy cows, SAA.
In addition, Mboweni ordered the release of
long overdue VAT refunds, but then ginned this up as "stimulus". A
pretty weak attempt to make a buzz out of a bare correction to the norm.
And this is the general problem with Mboweni's
first major contribution to public debate since laughably tweeting about a SA
sovereign wealth fund before his ministerial appointment. Mboweni got more
serious in his official capacity but many of us have not. The five-minute
countdowns, breathless commentary and wall-to-wall anticipatory coverage of
this speech could almost trick you into believing that it was bound to be
consequential. But Mboweni's best accomplishments were symbolic, to temper
expectations by realism and not to incite much in the way of -phoria or
Moreover, and here he outdid expectations,
Mboweni laid potent but merely verbal blame at the feet of those who still
What Mboweni has not accomplished is anything
like a new budget or new vision for South Africa. Despite the spanking pizzazz,
the vision he put forth is very old, tried and tested – conservative
monetarism, fiscal discipline and accountable limited governance as the best
framework for a growing, dynamic and fairly rewarding economy. Then he twisted
this vision through substance, not symbolism, by promising another SAA
So the twin questions of how committed he is
to the clear old vision (in contrast to his tweets) and how successful he will
be in translating it into reality are open to the future. This speech could be
a harbinger of discipline and excellence, or merely a feint in that direction.
Mboweni is charismatic and accomplished so
must stand a chance of dragging policy in whatever direction he likes. But the
only thing beyond doubt is that he falls under President Ramaphosa, that great
enigma of South African politics who has managed to encourage and perturb
capitalists and Marxists, race-nationalists and classical liberals one and all.
The end to which Mboweni works is likely whatever Ramaphosa has in mind. There
lies the mystery still very much in the shadows of the deep.
- Gabriel Crouse is an Associate at the Institute of Race Relations (IRR), a liberal think tank that promotes political and economic freedom. If you agree with what you have just read then click here or SMS your name to 32823 (SMSes cost R1, Ts and Cs apply).
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