GUMANI TSHIMOMOLA: EFF’s condition for post-election coalition is a shift in Treasury’s role

EFF president Julius Malema was correct in saying in a recent radio interview that the National Treasury is at the centre of SA’s deteriorating economic state, and that the party could only play a strategic role in a post-2024 election scenario should it go into coalition with the ANC with EFF deputy president Floyd Shivambu as finance minister. 

Because of the tendency to want to divert from serious issues, the discussion ended up being about Shivambu, who has been a member of the standing committee on finance in parliament for the past decade and has led much of the EFF’s articulation on political economic and reform. Many missed the fundamental point, which is that since the National Treasury is at the centre of all decision-making it is influential beyond what many are able to comprehend.

Since Malema made that statement it has become clear that very few people understand the National Treasury’s true role in SA’s political economy. There are some, including in the ANC, who believe the Treasury’s powers are limited to fiscal policy, meaning the allocation of funds to government programmes. Yet in terms of the law this power actually rests with parliament through the passing of the appropriation bill, which the president must sign into law unless he has reservations concerning some constitutional consequence. This is not understood by many, as you will often hear people say they will go to the Treasury to request money, instead of to parliament. 

The limited understanding of the National Treasury’s role in SA’s political economy led me to write my doctoral thesis on the subject. With the benefit of interviews with former senior officials of the Treasury and former deployees of the ANC, I was able to establish key insights into the institution, including:

• The National Treasury has, since the formation of the Union of SA, attempted to establish control over fiscal policy, with little success. This was in line with a global phenomenon, as in the late 1800s and early 1900s treasuries all over the world played only a modest role in the political economy;
• It was only in the early 1970s, with the emergence of the neoliberal era, that the National Treasury began to emerge as a force in SA, still with contestation as it was not responsible for overall macroeconomic policy co-ordination;
• The mid-1980s sovereign debt crisis catapulted the Treasury into the centre of SA’s politics, and as a result the country gained profound prestige; and
• Consequently, the National Treasury was able to drive economic planning and co-ordination, using the crisis to usher in more concrete neoliberalism in a society that had experienced decline in the rate of profitmaking and was faced with a political crisis. 

More fundamentally the research demonstrated that academia has paid little attention to the Treasury as an institution central to economic planning and co-ordination that is often comfortable to emulate Western forms of political economy literature. It was conclusively found that the co-option of a few ANC officials, such as Trevor Manuel, Tito Mboweni, Maria Ramos, Ismail Momoniat and Lesetja Kganyago into the ranks of the National Treasury, sometimes into senior positions with minimal professional experience, allowed the Treasury to operate in the background with hardly any interference by the ANC, even when it had majority rule.

In the post-apartheid era the Treasury has been largely beyond politics, cemented by the constitution, which makes specific mention of the powers of the National Treasury, though this is a subject that still needs further interrogation. Today, the Treasury’s institutional architecture enables the institution to make policy that influences every sphere of our lives with only cosmetic consultation.

The National Treasury, together with the SA Reserve Bank, has become an authority unto itself, including on matters that by law are reserved for regulators, chapter 9 institutions and the National Assembly. Malema was therefore correct to say that it may not necessarily matter which political party has more seats in the National Assembly or the cabinet if we have a coalition government after the May 29 elections, since the National Treasury will remain central to the form and character of SA’s economy. As long as the National Treasury’s institutional makeup, policies and procedures remain untouched, there is very little that can change.

Yet it is only through changing the National Treasury, its entire makeup in policy, institutional structure, and its relationship with the rest of the state, private sector and regulatory framework, that any post-election coalition will stand a chance of fighting unemployment, poverty and inequality, giving the country an opportunity to finally transcend how colonialism imagined the lives of black people would be. 

• Dr Tshimomola is EFF senior researcher in the parliamentary caucus. His PhD thesis was titled “The Treasury’s role in SA's political economy: a study of an institution at the centre of a class project in the era of transition”.