/ 27 October 2017

Silence in telling places speaks volumes

Malusi Gigaba spoke of the Telkom sale in his speech
Malusi Gigaba spoke of the Telkom sale in his speech


Finance Minister Malusi Gigaba’s maiden budget speech had some unsettling moments that had nothing to do with the blistering financial realities facing the country or the dearth of ideas to fix them.

Normally, in budget lock-ups journalists get all the technical and policy documents, including the minister’s speech, under embargo.

This time the speech was late, as was the embargoed press briefing that the finance minister gives to journalists ahead of appearing in the National Assembly. This is not the first time it has happened, but it is never a good sign.

But when it did come, it was not what the speech contained but what the policy documents did not that would be truly telling.

Fresh off the presses, on page 17 of the speech, Gigaba announced the state was going to sell a portion of its shares in Telkom to pay for the bailouts of SAA and in the South African Post office. It was a stark contrast to the budget policy statement, which was silent about any plans for a Telkom sale.

The plan has been widely speculated on, in the face of the billions of rands the fiscus has had to cough up for the airline and the lack of money available to do so.

But after Telkom withdrew a cautionary statement about the possible sale, the plan was thrown into doubt and the question of where the government could possibly raise the money from again loomed large.

Yet all the policy document had to say about this issue was a deliberately vague statement about how the government was eyeing assets to be sold off.

On our return to the lock-up, it became clear that treasury officials had not been made aware of the change and the incorporation of the news into the belatedly supplied copies of the speech.

Now, there may be a million reasons for this kind of confusion. It could simply be a hiccup in the flow of information, from a team that was facing enormous pressure.

A senior official suggested that the announcement had been handled in this way to manage the market impact on Telkom.

But it could also be a sign of a minister who has not taken the team of accomplished professionals in his department into his confidence.

Even more worrying, it could be a sign of a Cabinet that waited until the 11th hour to confront the inevitable, and make a hard choice: sell Telkom shares or you will breach the government’s expenditure ceiling with no hope of rectifying the damage.

Whatever the case, it does not bode well for the extremely difficult choices President Jacob Zuma’s administration faces in the months to come.