ON THE MONEY
STUART THEOBALD: The private sector could pull the plug on government bonds if it really wanted to
‘Fund managers have a fiduciary responsibility to ensure their investors’ money is going to be well managed, and right now they cannot think that of the state’
Business is losing its patience. An advertisement in Sunday’s main papers by Business Leadership SA was unrestrained in criticising President Jacob Zuma’s firing of finance minister Pravin Gordhan, ignorance of the economic effects of junk status, and the propaganda campaign being waged against those who criticise him and the Gupta family. It is unprecedented for business to take such an aggressive stance. The ad decried the poor management of state institutions and enterprises and demanded a return to independent institutions, an effective state and respect for the Constitution. But if the private sector is so concerned about the direction of government under Zuma, it has a powerful tool it can use: its funding of the state. I’m not talking about taxes – those are a legal requirement. But every week, the private sector invests billions of rands in government bonds to fund the budget deficit. It could stop doing it both as an act of protest and because it has a fiduciary responsibil...