ACDP MP and spokesperson on Finances, Steve Swart, this afternoon said the appointment of National Treasury Director-General Lesetja Kganyago as the new Deputy Governor of the Reserve Bank will weaken National Treasury.

"The ACDP wishes to congratulate former National Treasury Director-General Lesetja Kganyago on his appointment as the new Deputy Governor of the Reserve bank. During his tenure at National Treasury, he has managed the economy and fiscus extremely well. He has participated in some 15 budget s and under his watch the budgetary process has become the international bench mark for transparency and accountability. His departure will no doubt weaken National Treasury given his extensive knowledge and expertise of domestic and international finances.

The ACDP regrets that Kganyago's successor at National Treasury was not found before his departure, given the pressures on National Treasury to change its prudent counter-cyclical fiscal policy. The Deputy Governor's position has been vacant for some time now and a further delay in filling the position whilst Kganyago's successor was found would have caused no harm. Whilst we appreciate that such appointments take time, we trust that his successor will be appointed as soon as possible as investors and the markets do not like uncertainty.

The new Director -General will face a number of challenges in managing the economy to achieve growth figures needed to address unemployment and poverty. This is on top of global economic challenges such as in the European Union with the looming sovereign debt crises in Portugal and Spain .

He will also have to contend with uncertainties as to which Department de facto determines economic policy given the important role given to the Economic Development Department to spearhead the New Growth Path. 

Parliamentarians are also able to amend the Budget under certain circumstances in terms of the Money Bills Amendment Act, and may succumb to populist pressures which will add to the new DG's challenges.

The Minister of Finance, Mr Pravin Gordhan, will however no doubt be able to guide National Treasury through this period of transition and provide the stability required by investors and the markets.

Lastly, the ACDP wishes Mr Kganyago well in his appointment to the South African Reserve Bank, and thanks him for his many years of dedicated service to National Treasury. National Treasury's loss will undoubtedly be the Reserve Bank's gain.

Statement issued by Steve Swart MP, ACDP finance spokesperson, March 25 2011

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