Pravin Gordhan should be appointed to “bang heads together” to boost economic growth and create jobs in SA

8 July 2016

The Minister of Finance, Pravin Gordhan’s subdued response to the International Monetary Fund’s (IMF) Article IV report illustrates, while he has the political will, he does not have the political authority necessary to implement the structural reforms required to boost economic growth and create jobs in South Africa. 

The IMF’s report provided a sobering assessment of the economy, including forecasting economic growth of a mere 0.1% for 2016, and recommended“wide-ranging structural reforms” to boost economic growth and create jobs in South Africa. 

The Minister conceded the need for structural reforms, but in an unusually subdued response was only able to state that he “expected” economic growth and employment to be supported by structural reforms being implemented as a result of the National Development Plan.

However, the evidence suggests that the Minister’s expectations are misplaced. The fact is structural reform is being resisted by:  

trade unions, especially Cosatu, who recently snubbed the Minister by claiming that negotiations over pre-strike balloting were “nowhere near closure”; and

rent-seeking individuals, such as Dudu Myeni, who continue to wreak havoc at failing state owned enterprises, like South African Airways.

This was not lost on the IMF, which noted that when it comes to structural reform, “implementation has lagged” and that progress was “mixed”.

In the end, while the Minister has the political will, he does not have the political authority necessary to “bang heads together” and implement the structural reforms necessary to boost economic growth and create jobs in South Africa.

That is why if President Jacob Zuma had the people’s interests, rather than his own interests at heart, he would appoint and give the Minister of Finance, Pravin Gordhan, the political authority he needs to coordinate the implementation of the structural reforms necessary to boost economic growth and create jobs in South Africa.

Issued by David Maynier, DA Shadow Minister of Finance, 8 July 2016