South Africa: The Triumph of Nene

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

First impressions matter. I first happened on Nhlanhla Nene, South Africa’s second-time finance minister, some years ago now, at a Chatham House event in London. Former minister in the presidency, Jeff Radebe, was also present, as I recall. Mr Nene and selected ministers were there to take questions from economists, analysts and journalists on the state of their country’s affairs. Africans, often nostalgic about home, who are typical attendees of these Africa-focused events, were also in the audience. I am not sure now what question I asked Mr Nene. But I am almost certain it was a difficult one. As in my own case, my team members would be expecting the notes of the event, I was at the ready with my pen waiting for Mr Nene’s reply – there are usually a couple of questions taken at a time. Imagine my surprise when before answering mine, Mr Nene acknowledged me by name. We had never met before. Naturally, I was pleased. (It is a familiar trick by politicians, I know.) But since I was not the primary analyst for South Africa at my bank, he did not have to put in the effort. I would find out in due course that this was in line with his humble nature.

Smart choices
So yes, I was distraught by his unceremonious dismissal about a year later by the president of South Africa at the time, Jacob Zuma. It did not take long before the reasons why he was excused from the cabinet came to light. Unsurprisingly, Mr Nene got caught in the crosshairs of his erstwhile principal because he would not allow him have his way with the treasury. With the benefit of hindsight, it is now well-known the enormity of the forces he had to contend with. It is not unlikely Mr Zuma particularly took umbrage that someone who should expectedly be culturally inclined to his whims would be so bold. Momentarily, Mr Zuma appointed a replacement so evocative of his disdain for excellence, competence, and integrity that even he, whose unique resilience is without question, could not handle the backlash. Mr Desmond van Rooyen lasted just days as finance minister. His replacement was a former finance minister: Pravin Gordhan. Reports suggest Mr Nene was approached to take his job back but declined. He did himself a great service. Mr Gordan suffered grief upon grief working for Mr Zuma. In the end, the wily former president won what is certainly now a pyrrhic victory. Now, Mr Gordhan has been reappointed minister by President Cyril Ramaphosa; albeit to the probably now equally relevant public enterprises ministry. The drama between Mr Zuma and Mr Gordhan was a source of many columns, as I recall. Two prominent victims of Mr Zuma’s unusual ways, both former finance ministers under him, have made such an extraordinary comeback in relatively little time, that they can be nothing short of inspirational. They are humble, sound and well-respected by market participants. President Cyril Ramaphosa is smart to appoint them to his cabinet.

Same colour
The task before the new finance minister is huge. He inherits a budget that was presented about a week before his appointment. It is not the way he would have wanted to start. Not that he likely cares very much for credit. But a finance minister makes a mark by first setting out an agenda via the budget statement. No matter. He would get a chance later in the year, when hopefully, he would be in good stead and health to present the medium term bugdet policy statement. Even so, the 2018 budget is a good one; a remarkable turnaround by former finance minister Malusi Gigaba – whose “survival” and reassignment to the home affairs ministry is also instructive but not as inspiring – from what was a sloppy mid-term budget in October. In that less than remarkable proposition, Mr Gigaba was honest to a fault about the state of the country’s finances but not as creative or bold with the solutions to fix the problem. In February, he redeemed himself by making firm fiscal proposals that should plug the gaping 50 billion rand hole in the fiscus. Yes, an increase in the value-added tax is not exactly equitable. After all, the huge fiscal gap could be traced to the profligacy of the Zuma administration. What did emerge, though, was how who is president, matters; for some cadres of the ruling African National Congress (ANC) party, at least. Mr Gigaba was impressive under a better sheriff. This is one of the reasons why Mr Nene is a truly remarkable person: he will do the right thing no matter who the president is.

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