The appointment of the new Minister of Finance, Malusi Gigaba, has been a disaster for the economy of South Africa.
The minister’s first one hundred hours, in what he called the “hot seat”, has been a monumental shambles – the rand tanked, ten-year bond yields spiked and the country was downgraded to “junk status” by Standard & Poors.
This should not come as a surprise considering the minister’s weekend press conference, which was called to “restore confidence and restore calm”, but then proceeded to do exactly the opposite.
He suggested that:
- policy changes could be expected when he committed himself to implementing “radical economic transformation”; and
- that institutional changes could be expected at National Treasury, which he seemed to suggest was dominated by “orthodox economists, big business and international investors”.
And it got worse when the minister could not explain what “radical economic transformation” meant and was forced to concede there was still “a whole lot of clarification that we have to do.”
The minister then compounded the problem at today’s press conference, which was called to do damage control following the downgrade to “junk status”, when he suggested that he was “committed to inclusive growth”, but had not abandoned “radical economic transformation”.
The minister’s damage control exercise was an own goal because it will give oxygen to the narrative that there is policy uncertainty and it will not go down well with the ratings agencies, which are concerned about possible “policy shifts” following the midnight cabinet reshuffle.
The fact is that the minister is just not up to the job and there is now a strong impression that: Malusi Gigaba is just Des Van Rooyen in a designer suit.