President Jacob Zuma is guilty of the pre-meditated murder of the economy in South Africa

Note to Editors: The following speech was delivered in Parliament today by DA Shadow Minister of Finance, David Maynier MP, during the Budget Vote on National Treasury.
Madam Speaker,
The Minister of Home Affairs, Malusi Gigaba, was at a fashion show, rubbing shoulders with the rich and famous, when the call came informing him that he had got the top job and would be the next Finance Minister.
It was not long before the new Minister and his sidekick, Mayihlome Tshwete, swooped down, rather like Batman and Robin, on National Treasury.
The Minister, to his credit, passed the first big test of any South African Finance Minister – he lasted the weekend.
This was the culmination of a shameful midnight Cabinet reshuffle. President Jacob Zuma had:

  • Recalled the former Minister of Finance, Pravin Gordhan, from an international investor roadshow on the basis of a bizarre “intelligence report” claiming he was part of a plot to mobilise people to overthrow the state; and
  • Then promptly fired him to, can you believe it, “improve efficiency and effectiveness”.

The truth is that, had the President been serious about improving efficiency and effectiveness, he would have fired Bathabile Dlamini and Faith Mthambi who, together, could barely run a bath.
The Deputy President, Cyril Ramaphosa, condemned the Cabinet reshuffle, saying it was “unacceptable”.
Even, ANC Secretary General, Gwede Mantashe, condemned the Cabinet reshuffle, saying he was “very uncomfortable”.
But, the Minister defended the Cabinet reshuffle by condemning those who had condemned the Cabinet reshuffle.
He dismissed them as “a mixed bag of so-called ANC stalwarts and disillusioned ex-ANC leaders who were ill-disciplined”.
The fact is President Jacob Zuma’s midnight Cabinet reshuffle had nothing to do with improving efficiency and effectiveness and everything to do with the capture of National Treasury for his most important clients, the Guptas.
And the President had the perfect man for the job in his new Finance Minister, Malusi Gigaba, because in his own words, “I don’t ask questions, I simply comply with instructions.”
Things have been in absolute shambles since the Minister took over, as he somersaulted between “radical economic transformation” and “inclusive economic growth”, and between attacking orthodox and right-wing economists at National Treasury and supporting the skilled and experienced team at National Treasury.
However, things went from bad to worse when the Minister appointed Professor Chris Malikane, who seems to have been trained at the “Hugo Chavez School of Economics”, and who has some mad ideas on the economy, including nationalising the banks, mines and insurance companies, as his economic advisor at National Treasury.
Of course, when you have a Minister, who in his own words simply complies with instructions, who advises him is an important issue.
Things began to spin out of control as the Minister told his economic advisor to “keep quiet”, but the economic advisor told the Minister he would not “shut up”.
The Minister was forced into damage control mode, sending his economic advisor to the equivalent of the “re-education camp” to be “rehabilitated”.
Now, I have said before that the Minister was “Des van Rooyen in a designer suit”.
But, I was wrong.
Because, at least Des van Rooyen has a Master’s degree in finance, even if half his assignments were done by the Parliamentary Budget Office.
Whatever the case, the Minister has lost control and the message is now one part Bloomberg, one part ANN7, and one part The Real Housewives of New York.
The National Treasury’s legislative mandate, and the R30.79 billion budget for the 2017/18 financial year, are directed at ensuring transparency, accountability and sound fiscal controls in the management of our public finances.
But the question is: how long can this last?
Because, like all politicians accumulating power, the Minister has concealed his real political agenda, which he revealed, in an unguarded moment, during his maiden press conference, and which included:

  • A strong commitment to implementing “radical economic transformation”; and
  • An attack on National Treasury, which he believes is dominated by big business, international investors and orthodox economists.

The fact is, and let us not be naïve about this, the Minister has been appointed to “defang” National Treasury.
And he will do it with charm and cunning, and he will do it patiently and slowly:

  • By exerting political control and reducing the institutional independence of National Treasury;
  • By diluting the legislative mandate to reduce the institutional strength of National Treasury;
  • By controlling the procurement process;
  • By controlling the Public Investment Corporation; and
  • Most importantly, by approving the nuclear build programme.

If you look carefully, the work is already underway “below the line” with

  • The Minister in the Presidency, Jeff Radebe, “power-grabbing” the budget prioritisation process from National Treasury; and
  • The Minister of Justice and Correctional Services, Michael Masuta, “power-grabbing” control of the Financial Intelligence Centre from National Treasury.

The truth is that National Treasury is in danger of being “defanged” and reduced to a bunch of bookkeepers under the new Minister and his boss, President Jacob Zuma.
We cannot afford to surrender to the mafia state and so we are going to have to fight to maintain the institutional independence and institutional strength of National Treasury.
What this means is that the Finance Committee is going to require a reset from legislative mode to oversight mode and carefully scrutinise procurement, public investments, contingent liabilities and fiscal risks, including most importantly the nuclear build programme.
The fact is that, in the end, President Jacob Zuma must have known that the midnight Cabinet reshuffle would push the economy off the cliff.
We are now in deep trouble with the midnight Cabinet reshuffle and radical economic transformation delivering:

  • stagnant economic growth;
  • declining per capita incomes;
  • a collapse in investment;
  • a spike in disinvestment;
  • massive unemployment;
  • staggering national debt;
  • “zombie” state-owned enterprises;
  • junk status; and
  • ultimately, a loss of hope for the millions of South Africans who do not have jobs, or who have given up looking for jobs, and who live without dignity, without independence, and without freedom, in South Africa.

That is why it is not an exaggeration to say that President Jacob Zuma’s midnight Cabinet reshuffle, and his policy of radical economic transformation, amounts to the pre-meditated murder of the economy in South Africa.
So, if you do not have a job, or you have given up looking for a job, you need to know this: You do not have a job because the ANC-government has systematically mismanaged the economy; and

  • You do not have a job because the ANC-government has systematically mismanaged the economy; and
  • You will never get a job as long as the ANC-government is in power in South Africa.

That is why you will have a choice, in the 2019 National Election, between a strong know-how economy, which creates jobs for all, led by the DA, or a weak know-who economy, which creates jobs for the few.
We say: bring it on.

“Malikanegate”: Now the minister’s economic advisor says he will never “shut up”

The Minister of Finance, Malusi Gigaba, needs to act decisively to stop the bleeding following his appointment of Professor Chris Malikane as his economic advisor.
Last week the minister claimed his economic advisor had been “reined in” and told to “keep quiet”.
But since being “reined in”, the minister’s economic advisor has done anything but “keep quiet”.
He was interviewed by:

  • SAFM (bashing ratings agencies);
  • Cape Talk (bashing the private sector);
  • Sowetan (bashing the National Development Plan); and
  • Rapport (warning of coming civil war).

And he appeared at the minister’s side during his international investor roadshow in the United States.
In fact, the minister’s economic advisor now denies being told to “keep quiet”, defiantly claiming there is no way the minister could tell him to “keep his mouth shut”.
This is what the minister’s economic advisor said in response to a question about the ministerial gagging order:
“No, no, no, no. People’s inference of what the minister said is wrong. There is no way the minister can tell a fellow South African to keep his mouth shut. I am an academic, I work with ideas. I have to challenge public opinions that mislead the nation. When the minister said he reined me in, he meant we should no longer focus on talking, but on doing – action that will transform the economy.”
We can only conclude that either the minister was lying when he claimed his economic advisor had been told to “keep quiet”, or he is too weak to ensure that his economic advisor does in fact “keep quiet”, and his economic advisor has gone rogue.
Whatever the case, the minister must now face up to the fact that his first few weeks on the job have been a disaster which has undermined investor confidence and fueled policy uncertainty.
The minister has tied himself into knots by:

  • somersaulting from “radical economic transformation” to “inclusive economic growth”;
  • attacking “orthodox” and “right wing” economists at National Treasury; and
  • appointing an economic advisor who wants to turn South Africa into Venezuela.

The fact is that the minister’s economic advisor has become a political liability and it is now time for him to act decisively and stop the bleeding by cutting him loose and sending him back to the seminar room where his mad ideas about the economy will do no harm to South Africa.

Controversial Professor Chris Malikane accompanies Malusi Gigaba to the United States

The Minister of Finance, Malusi Gigaba, appeared to have distance himself from his economic advisor, Professor Chris Malikane, who’s mad ideas on the economy had shaken investor confidence, ahead of an international investor roadshow in the United States.
The minister was forced into damage control mode reassuring investors that it was not government policy to nationalize banks and publically slapped down Professor Chris Malikane like a schoolboy in a way that suggested his days were numbered.
However, nothing could be further from the truth because it has now emerged that Professor Chris Malikane accompanied the minister on the international investor roadshow in the United States.
This morning the minister’s spokesperson, Mayihlome Tshwete, posted pictures on social media of the minister and his economic advisor engaged in a convivial conversation at the International Monetary Fund in the United States. [here, here and here]
The minister’s “roadshow message”, released by National Treasury, includes a commitment to “inclusive growth, prudent fiscal discipline and sound economic policies”.
But Professor Chris Malikane’s presence sends exactly the opposite message and will be a major red flag to international financial institutions, international investors and rating agencies in the United States.
In the end, the fact that the minister invited Professor Chris Malikane to accompany him on the international roadshow raises serious questions, not only about his judgment, but also about whether he can be trusted to act in the best interests of South Africa

Malusi Gigaba in full damage control mode following the appointment of Chris Malikane

The Minister of Finance, Malusi Gigaba, is in full damage control mode following the appointment of Professor Chris Malikane as his economic advisor ahead of an important international investor roadshow in the United States.
The fallout from the appointment has forced the minister to issue a media statement distancing himself from his own economic advisor’s mad ideas and reassuring investors that it is not government policy to nationalise the banks.
The fact that the minister is in damage control mode is proof enough that Professor Chris Malikane should never have been plucked out of the seminar room, where his mad ideas could do no damage to the economy, and appointed as an economic advisor, where his mad ideas can do damage to the economy.
The minister seems to think that it is possible to “firewall” himself from his own economic advisor’s mad ideas and that it is possible for his economic advisor to be left to “think aloud” as he takes on what he calls “right wing economists” at National Treasury.
This is simply impossible and will no doubt send a chill up most international investors’ spines and will ensure a hostile reception during the international investor roadshow in the United States.

Malusi Gigaba’s new economic advisor will be used as a battering ram in battles with National Treasury

The Minister of Finance, Malusi Gigaba’s, reported controversial appointment of Professor Chris Malikane as his economic advisor should come as no surprise in South Africa.
The minister set out his political agenda in his maiden press conference on 01 April 2017, which includes: transforming the economy by implementing “radical economic transformation”; and transforming National Treasury because it is dominated by “orthodox economists, big business, powerful interests and international investors”.
The appointment of Professor Chris Malikane, who appears to have been trained at the “Hugo Chavez School of Economics”, is entirely understandable and a logical consequence of the minister’s political agenda, to implement “radical economic transformation” and to take on orthodox economists at National Treasury.
The fact is that Professor Chris Malikane has been appointed precisely because he is an unorthodox economist and he will be used as a ministerial battering ram in coming battles with orthodox economists at National Treasury.
In the end, Professor Chris Malikane’s appointment will reinforce the perception held by the ratings agencies that there will be major shifts in economic policy, which will shake investor confidence and contribute to a ratings downgrade of South Africa.