Hot bets for Ramaphosa’s cabinet
Ramaphosa will have to remove several ministers who are grossly incompetent or compromised, or both
As enthusiasm for newly elected President Cyril Ramaphosa’s presidency builds, there are two immediate tasks ahead of him: reshuffling his cabinet and averting a Moody’s downgrade.
Under former president Jacob Zuma the cabinet more than doubled to 74 ministers and deputies. But given SA’s fiscal distress and the R30m-R50m/year it costs to run a ministry, it is clear that Ramaphosa will have to slash his cabinet.
He has undertaken to reconfigure it, but will have to move with speed if he is to influence Moody’s, which will decide before March 24 whether to junk SA’s local credit rating.
What matters, according to Moody’s vice-president Zuzana Brixiova, is the new leadership’s response to SA’s economic and fiscal challenges and the progress it makes in implementing reforms to address them.
In other words, it is looking for action, not promises of action.
At a minimum, Ramaphosa will have to remove several ministers from office who are grossly incompetent or compromised, or both, including Bathabile Dlamini (social development), David Des van Rooyen (co-operative governance), Mosebenzi Zwane (mineral resources), Lynne Brown (public enterprises), Faith Muthambi (public service & administration) and Bongani Bongo (state security).
In addition, a Financial Mail poll of several leading economists produced an overwhelming consensus for the departments of trade & industry, economic development and small business to be merged to save money and align economic policy.
"We can’t have three or four departments and ministers formulating different bits and pieces of economic policy," says Sanlam Investment Management economist Arthur Kamp. "If one minister takes responsibility it should enhance accountability and make for better outcomes."
Furthermore, small business development should be at the centre of economic policy and not merely tagged on, "since it’s small businesses that drive growth and employment".
Raenette Taljaard, who heads Economic Research Southern Africa, suggests a new ministry for innovation to deal with the rise of artificial intelligence and the fourth industrial revolution.
She also suggests a new ministry for inclusivity to make the fight against inequality visible in all portfolios.
It should measure reductions in inequality and report annually under a high-level champion, someone like former deputy chief justice Dikgang Moseneke, she says.
"We need to find visible ways to link economic growth objectives with material changes in life conditions to secure social buy-in."
Taljaard would also like retired judges Albie Sachs or Yvonne Mogoro to be brought into the social development portfolio to focus on the progressive realisation of rights.
The Financial Mail poll produced strong support for former finance minister Pravin Gordhan as the minister of public enterprises. He is widely seen as having the steely resolve required to clean out the state-owned enterprise (SOE) sector — something Ramaphosa has promised will be expedited.
None of the respondents thinks current finance minister Malusi Gigaba should retain his portfolio, given his lack of fiscal experience and the perception that he facilitated the plundering of SOE coffers by the Guptas while at public enterprises.
"He is [a] walking symbol of patronage and fiscal pillage," says Iraj Abedian, CEO of Pan-African Investment & Research Services.
"As the minister of finance he will ruin what is left of the country’s fiscal credibility," he says.
Former finance minister Nhlanhla Nene and his erstwhile deputy, Mcebisi Jonas, are both firm favourites to return as finance minister. Naledi Pandor, Tito Mboweni and Zweli Mkhize are also named, with Wits University senior lecturer and economist Lumkile Mondi an outside bet.
Gina Schoeman of Citibank recommends former FirstRand CEO Sizwe Nxasana, saying it would be "a powerful move" to place someone from the private sector in the finance ministry.
Independent economist Thabi Leoka thinks the synergy that could be created by having private sector expertise in the cabinet could be important in taking the country out of its "economic rut".
She suggests, for instance, that former Nedbank chairman Reuel Khoza should be in charge of a newly merged trade & industry, economic development and small business department, since he has run businesses and understands the need for market-friendly policies while also prioritising the creation of local entrepreneurs.
Abedian agrees that the three departments should be merged and run by "a successful industrialist" with no political baggage or ideological attachments.
"This portfolio requires a good knowledge of how the economy works and how the fourth industrial revolution is changing the structure of economies and industries," he says. "The current ministers have negative track records, are too close to their ideological positions and do not want to be confused by facts."
The International Women’s Forum SA has nominated Thuli Madonsela‚ Naledi Pandor‚ Lindiwe Sisulu‚ Makhosi Khoza‚ Cheryl Carolus and Phumzile Mlambo-Ngcuka as preferred members of the cabinet, saying they are women of "proven ability‚ integrity and courage".