/ 5 May 2017

Gigaba: ‘We’ll work within the law to transform SA’

In his hands: Finance Minister Malusi Gigaba
In his hands: Finance Minister Malusi Gigaba

Finance Minister Malusi Gigaba has dismissed calls to expropriate land without compensation, saying the ANC government should use the existing constitutional and legal framework to achieve economic transformation.

In an interview with the Mail & Guardian on the sidelines of the World Economic Forum on Africa in Durban this week, Gigaba contradicted his new economic adviser, Chris Malikane, and senior ANC leaders, including President Jacob Zuma, who have called for land to be expropriated without payment.

The radical economic transformation debate is expected to dominate the agenda at the ANC’s policy conference next month. It will also be used as a proxy for the leadership battle ahead of the party’s elective conference in December.

“There is an Expropriation Act, which gives the government the authority to expropriate land for development. I think we need to exhaust that legislation before we can think of any additional measures, including [going] outside of the constitutional framework,” said Gigaba.

He told the M&G that he had once again reined in Malikane, after the adviser reiterated his call for a new economic policy and for an amendment to the Constitution – to nationalise key sectors of the economy. Malikane had been speaking at an event organised by the Black First Land First movement in Johannesburg last week.

“I don’t think he [Malikane] will ever do that again,” said Gigaba.

“I think you are dealing here with someone who has been invited to a dialogue prior to his appointment. And having been an academic, he had not known exactly the limits of an adviser’s role and the constraints and protocols of government … He now understands … advisers don’t have public opinions.”

Gigaba said Malekane’s opinions were “his own individual opinions” and did not reflect his own views or those of the ANC. “But from where I sit, I am much more concerned about utilising his skills to address the urgent challenge of our economy rather than fixate on the views that he holds,” said Gigaba.

Gigaba told delegates at a Black Business Council breakfast in Durban that it was time the ANC and government leaders defined the concepts of radical economic transformation and inclusive growth.

“Those who believe in radical economic transformation must stop pulling their hair out when somebody doesn’t say ‘radical economic transformation’, and think that you are a sellout. Those who talk inclusive growth must stop getting scared each time they hear the words radical economic transformation,” said Gigaba.

The finance minister said he also expected a robust debate on the land issue at the ANC’s policy conference.

“Nothing is sacrosanct. We will engage with all the discussions. But we need significant and meaningful land restitution that is going to transfer land assets to the landless.

“It cannot be that a whole stretch of land from Cape Town to Plettenberg Bay is in the hands of a few. It can’t be. We need to begin to open up spaces within the legal and constitutional framework so that people feel there is some justice,” said Gigaba.

He warned that, if South Africa did not move with speed on the land issue, it might end up in a similar situation to Zimbabwe, where supporters of President Robert Mugabe invaded white-owned farms some years ago.

When Gigaba was in Washington on a roadshow to woo investors last week, he met his Zimbabwean counterpart, Patrick Chinamasa.

“When he [Chinamasa] said: ‘Don’t do what we [Zimbabwe] did,’ he was warning us [South Africa] against two things. One, don’t wait until there is a self-initiative from the landless to own the land, and two, don’t go that abrupt route [that Zimbabwe went through]. Either way, you will pay a heavy price.”

“We have it within ourselves right now, pretty much within the constitutional and legal framework, to achieve the transformation we seek,” said Gigaba.

“Support, don’t privatise, parastatals”

Finance Minister Malusi Gigaba has ruled out the possibility of privatising struggling state-owned enterprises, saying the government needed to support them so they can play a developmental role.

The government has been criticised for spending billions of rands to bail out parastatals, prompting suggestions that privatisation might be the only viable option.

Ratings agencies have flagged the massive drain these entities are on the state’s already stretched finances. The contingent liabilities of parastatals contributed to the recent credit downgrades.

But Gigaba is adamant a solution can be found through good governance and by ensuring that qualified people are appointed to key positions. The parastatals can return to financial sustainability if they sort out management issues, he said.

“I think we need to get ourselves to a point where we say our state-owned companies must have good governance, good balance sheets and carry out their developmental mandates without fail,” said Gigaba.

He said South Africa could learn from China’s strong state-owned entities. “The question we must ask ourselves is: How did they [China] get there? How did China South Rail and China North Rail and all of [the other] state companies become what they have become, to a point where they have surplus capital to invest in Africa? [And] why our own state companies are not there … Sometimes, ourselves, we give praise to bad leadership. Bad, bad, bad,” said Gigaba.

He added that the difficulties faced by some parastatals were not owed to their own inefficiencies.

He said SAA had not been properly capitalised when it became a standalone state company.

“Over the years, a number of reasons have contributed to some of the financial woes [at SAA]: the jet fuel price and some of the deals they have entered into and some of the instability at governance level.”

He said by capitalising the airline and resolving its governance issues, “it is possible for SAA to become financially sustainable again”.

Gigaba said the Public Investment Corporation would help to fast-track transformation.

“There is more we can do to create space for the co-operative sector in the country. I think they have a greater transformative contribution to make if we look at it differently, and create capacity for them.

“We have set ourselves a goal of being a developmental state. East Asian tigers did not know they were developmental states until they had developed,” said Gigaba.