IRR: Appoint independent experts to key growth portfolios

Appointing a credible, qualified, and non-partisan individual to lead the Treasury offers a route to depoliticising key cabinet portfolios and allowing merit to take precedence over other considerations in government.

So says the Institute of Race Relations (IRR) in response to reports that, as political parties continue their negotiations over options for government formation, consideration is being given to the idea of appointing an independent minister of finance.

While the shape of a new government remains the topic of debate, considering  appointing an independent minister of finance harkens back to the appointment of Chris Liebenberg in 1994. Liebenberg’s tenure in Nelson Mandela’s cabinet enabled the new government to earn credibility with key economic and market players. Although brief, this heralded the beginning of a decade of constructive fiscal prudence that would coincide with a period of strong economic growth and the roll out of numerous social support policies, from housing to social grants. The resulting socio-economic progress also coincided with the ANC’s only period of electoral growth, with the party going on to win just short of 70% of the votes cast in the 2004 national and provincial elections.

Liebenberg became minister of finance in September 1994 after being chosen by President Mandela for the role in an unorthodox move. As Liebenberg – then the CEO of Nedbank – was not a member of Parliament or an active politician, a constitutional change, today entrenched in section 91(3)(c) of the Constitution, was necessary.

Says Hermann Pretorius, IRR head of strategic communications: “As economic growth is the fundamental challenge facing South Africa, it is encouraging that there might now be a route to reversing the damaging fiscal recklessness pushed by political interests from 2008 onwards. Since 2008, South Africa’s public debt has approximately tripled in size. Over the same period, state spending has steadily risen as a proportion of GDP. Yet, this spending, as shown in the IRR’s Slash Waste, Cut Taxes paper published earlier this year, has failed to ensure bang for buck. In fact, South Africa’s fiscal multiplier has over time turned negative, meaning wasteful and irresponsible government spending has incurred economic damage.

“A political meeting of minds that saw someone of the stature of Lungisa Fuzile or Daniel Mminele take over leadership of Treasury would be a welcome and critical development for South Africa as pressure mounts to get economic growth going.”

Constitutionally, two members of the cabinet can be appointed from outside the National Assembly. A finance minister appointed in this way would depoliticise this critical governmental role, going some way to ensuring that no government, whether minority or coalition, could utilise the extensive powers of the Treasury for nefarious gain. Such an appointment would be an important first step towards attracting skills to government roles and placing merit and ability above political loyalty in governmental roles.

Says Pretorius: “Beyond finance, however, the other cabinet portfolio that stands as a strong contender for the appointment of an independent expert to lead is that of mineral resources and energy. Economically, mining remains a critical sector, with the capacity and potential to drive massive job creation and attract investment. This sector has suffered extensive and unnecessary damage from decisions driven by political rather than rational and commercial interests that have curtailed the commercial viability of our country’s enormous mineral resource potential. Rolling back these policy failures would be a golden opportunity for economic recovery. An independent expert in this ministerial role would also show the commitment of a new government to dealing with the energy crisis holding South Africans back.

“It is important, however, to not lose sight of the fact that such appointments, while important, would be no magic wand. Independent experts as ministers will only succeed with the necessary political backing, from the President in particular. Beyond this political support, the competence and collaboration of civil servants will be vital to the successes independent expert ministers could achieve. As such, political parties must commit not only to the necessary leadership at the top of the finance and mineral resources and energy portfolios, but also to the support and availability of the tools to succeed.”

Media Contact: Hermann Pretorius IRR Head of Strategic Communications Tel: 079 875 4290 Email: hermann@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za