EDITORIAL: The frailty of the National Treasury
The last thing SA needs as it faces a looming fiscal crisis is for the investor community to start asking whether the Treasury is still fit for purpose
The National Treasury and the Reserve Bank — staffed by world-class officials who produce top-quality analysis and operate with a high degree of transparency — have long been regarded as two of the strongest pillars propping up SA’s flagging institutional capacity.
Over the past decade, the Bank has gone from strength to strength, absorbing a stream of officials from the Treasury, including the current governor, Lesetja Kganyago, his deputy, Kuben Naidoo, the Bank’s head of research, Chris Loewald, and economist Konstantin Makrelov.
Michael Sachs, the former head of the budget office, has moved to academia while former director-general Lungisa Fuzile is now the CEO of Standard Bank.
And that’s just the old guard. This week a fresh crop of senior officials are leaving: Roy Havemann, chief director of financial markets and stability; Catherine MacLeod, chief director for macroeconomic policy; and local government expert Steven Kenyon.
According to the Treasury, they’re off to pursue new career opportunities — such is the nature of the financial industry. And while their loss is "challenging", the Treasury says it still has experienced and skilled officials, and it continues to invest in training, development and mentoring.
It’s all very well to blame the rapid churn on financial sector mores, but then why isn’t there a stream of talent out of the Bank towards the Treasury? Why is it just a one-way street?
The last thing SA needs as it faces a looming fiscal crisis is for the investor community to start asking whether the Treasury is still fit for purpose — especially as Tito Mboweni is often seen as a reluctant finance minister and the ANC’s integrity committee has asked Mboweni’s inexperienced deputy, David Masondo, to resign.
Masondo apparently asked the Hawks to arrest a woman he was seeing. Masondo (who is married) insists he did nothing wrong, reportedly claiming that the woman harassed his family. Either way, it does nothing to engender confidence in Masondo’s judgment as Mboweni’s presumptive successor.
Then there’s Mboweni himself. Loved by the markets for his fierce independence and refusal to give SAA another cent of taxpayers’ money, Mboweni blows hot and cold. Part of the problem is that he’s always had one foot firmly planted on his Limpopo farm and doesn’t really seem to want the top job and the demands that go with it.
Perhaps if he had greater support from President Cyril Ramaphosa and his cabinet colleagues, he would cut less of a lonely figure.
There is speculation that Mboweni won’t last another year. To be clear, this would be a disaster for the country and only hasten its descent into a full-blown debt crisis, since there is no obvious successor within the government.
Kganyago, Naidoo and Fuzile have the requisite credibility and know-how but all are technocrats and the job is intensely political. Former deputy finance minister Mcebisi Jonas would be excellent but has turned his back on politics.
Even justice minister Ronald Lamola’s name is being flighted, though it’s unclear just how much specialist financial knowledge he has. This leaves only a narrow field of lightweight provincial ANC finance MECs to choose from — which shows just how shallow the talent pool has become.
Clearly, the Treasury’s stature cannot be taken for granted. It is in the whole country’s interests that it be strongly fortified. As former finance minister Pravin Gordhan once said: "It can take many years to build a solid institution, but it takes very little time to mess it up."
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