Fears new Gigaba aide will shift heat off Guptas
ANC economic transformation head Enoch Godongwana has questioned the rationale behind the appointment of Chris Malikane as Finance Minister Malusi Gigaba’s economic adviser, saying his views were in conflict with those of government policy.
Some in the ruling alliance believe Malikane was imposed on Gigaba by the controversial Gupta family and supporters of President Jacob Zuma to divert attention from state capture and towards the “radical economic transformation” debate. The latter debate has become a proxy policy battleground among factions in the ANC ahead of the party’s elective conference in December.
Said a senior alliance leader: “There is a convergence in the emergence of this rhetoric together with the employment of [public relations firm] Bell Pottinger by the Guptas. People see [this] as a deflection of the state capture debate to this rhetoric about radical economic transformation, white monopoly capital and the Ruperts [family, headed by billionaire Johann Rupert].
“That’s one aspect to it. Another aspect is being utilised as a platform for mobilisation for [the ANC] conference,” said the leader.
Godongwana said Malikane’s appointment came as a surprise to him because Malikane had been the only person in the National Planning Commission who had objected to the National Development Plan (NDP). Other members of the commission included Deputy President Cyril Ramaphosa and former finance minister Trevor Manuel, as well as Planning, Monitoring and Evaluation Minister Jeff Radebe and businessperson Bobby Godsell.
“Professor Malikane will be conflicted in the sense that he did not support the NDP, which is current government policy, and he is supposed to be advising the minister how to implement government policy, which among other things is the NDP,” said Godongwana.
In an abridged version of a paper by Malikane, published by the Sunday Times, he advocated for isolating the “enemies of the people, the white monopoly capitalists who own mining, banking, other industries and a disproportionate share of the land and credit based black capitalists”. He called for the expropriation of banks, mines and insurance firms and the nationalisation of land without compensation.
Godongwana had expressed his unhappiness with the axing of Pravin Gordhan as finance minister, but this week said he was so far comfortable with the direction Gigaba was taking. “I’m happy with the posture he is taking, which is consistent with what a minister of finance should represent,” said Godongwana.
Malikane’s appointment as Gigaba’s adviser may have reinforced fears that government policy would change, but Godongwana said he was confident this would not be the case.
“There is nothing that will impact on ANC policy. ANC policy is formulated by members of the ANC in properly constituted structures. For us, the deployee is the minister of finance [Gigaba], who has to implement ANC policy which is developed from time to time,” said Godongwana.
Earlier this week, Gigaba issued a statement distancing himself and the treasury from Malikane’s utterances, saying they were “not necessarily government policy” and that the minister would continue to be guided by the policies of the ANC.
In a press briefing ahead of his trip to attend the 2017 Spring meetings of the World Bank Group and the International Monetary Fund in Washington, DC, Gigaba said he had told Malikane to “keep quiet and allow me to do my work”.
The advice that Malikane supplied would “never detract” from the policies of the ANC and the Cabinet, said Gigaba. Nevertheless, the country should not be agitated by people who hold different views, especially if they stem from “an abhorrence” for poverty and inequality, he added.
Malikane could not be reached for comment on Thursday.
Despite Gigaba’s reassurances that there will be no sharp departure from established fiscal policy, investors appear to be taking a wait-and-see approach.
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Gigaba briefed asset managers in Cape Town last week. Aeon Investment Management chief investment officer Asief Mohamed who attended the meeting said: “[Gigaba] says what investors want to hear; the question is whether he is going to walk the talk.”
Mohamed said he was taking a “glass-half-full approach” but remained somewhat “sceptical”.
Another person who attended the meeting, who was not authorised to speak on the record, said it was evident that “investors did seem sceptical of the new minister”.
Among the concerns raised by asset managers were policy changes, the question of nuclear procurement, “radical economic transformation” and managing the effect of the recent credit ratings downgrades.
“The actions are what we are going to be watching … and we really are only going to be able to tell over time whether he is walking the talk,” the source said.
A lingering question regarding the recent Cabinet reshuffle remained, with investors asking why, if policy was not going to change, it had been necessary to replace the finance minister and his deputy.
Although Gigaba has distanced himself from Malikane’s statements, appointing an adviser who espoused views “totally out of line with government policy” was a concern to some investors.
“If things are not going to change, why then would you appoint an adviser … who has some fairly unorthodox economic views?” the source asked, especially as institutional knowledge and expertise within the treasury “is very strong”.
Bonang Mohale, the deputy chairman of Business Leadership South Africa (BLSA), said all that business needs is “a clear and supportive fiscal regulatory and legal environment”.
“The minister needs to think through that very clearly and then articulate it in a concise and precise manner. You need to, as a minister, tell us what you are going to do and then do it.”
Mohale said the minister’s message to investors during his United States trip should be simple: “Even though I’m the new finance minister, I’ve inherited a very effective and efficient department with already established policy and procedure, and mine is to continue with the execution and implementation of that policy.
“In these times, less is more.”
Business leaders under the helm of BLSA have asked for a meeting with the presidency, saying after the recent Cabinet reshuffle was seen to have damaged the trust between business and government. – Additional reporting by Lisa Steyn and Given Sigauqwe