Banking Association of South Africa MD Cas Coovadia. Picture: FINANCIAL MAIL
Banking Association of South Africa MD Cas Coovadia. Picture: FINANCIAL MAIL

Finance Minister Malusi Gigaba should prioritise working with the private sector to tackle governance failures and management issues at state-owned enterprises (SOEs), says Banking Association SA MD Cas Coovadia.

Coovadia also emphasised the need for the government to revitalise the CEO Initiative, which had fallen by the wayside after March’s cabinet reshuffle when Pravin Gordhan and Mcebisi Jonas were axed as finance minister and deputy finance minister, respectively.

The CEO Initiative had helped bolster investment and engaged credit ratings agencies.

The minister had to use the medium-term budget policy statement “to put clear and decisive steps that encourage national and global private sector investment on the table”, said Coovadia on Monday.

Finance Minister Malusi Gigaba. Picture: TREVOR SAMSON
Finance Minister Malusi Gigaba. Picture: TREVOR SAMSON

“Without this, it remains all but impossible to address fiscal constraints and the expected shortfall in tax revenues that will continue to impact service delivery and the poor, who remain marginalised because of the inability to address the crisis in which we find ourselves,” Coovadia added.

The medium-term budget statement is to be presented on October 25. Credit ratings agencies will look to it for signs that the government is on track with fiscal consolidation to slash the budget deficit.

“Our biggest concerns are that the economy is not growing, and we are facing severe fiscal constraints,” said Coovadia.

The first-quarter shortfall in tax revenue was in the region of R17bn and the shortfall for this financial year is projected to be around R50bn.

“He [the finance minister] needs to be bold and announce clear and stiff accountabilities for [state entities].…

“He also needs to intervene in issues at SARS [South African Revenue Service] and put that organisation back on to the path of excellence.

“[The minister] will need to look at curtailing expenditure. Unfortunately, he is in no position to raise taxes....”

menons@businesslive.co.za 

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