PETER ATTARD MONTALTO: Cabinet reshuffle myths, folklore and reality

Looking back at the cabinet reshuffle, all we see is a range of sub-par ministers who’ve been shuffled from one portfolio to another due to a lack of better options.

This column was first published in Business Day. 

SA loves a reshuffle. I probably got more WhatsApps from clients, journalists, ANC watchers and party insiders in the past two weeks than in the previous few months combined.

There was certainly drama in the end, but when zooming out it is clear there was a significant lack of choice in several senses — something people seemed to forget. With only two non-MPs to choose from (and one with Ebrahim Patel still stuck in his portfolio), MPs were the only real choice.

When we stand back from this reshuffle we see the broad status quo: a range of sub-par ministers who have been shuffled from one portfolio to another due to a lack of better options.

We also get clear signals of the balance of importance the president puts on politics (whether provincial or internal party) versus policy and reform. This is seen in several places such as the departments of mineral resources & energy and police, where the ministers have remained in place for political reasons despite the clear need for change in both.

There were improvements. Undoubtedly, Thandi Modise in defence will be a force to reckon with for any lazy general compared with her confused predecessor.

Yet there were also complicated outcomes. Replacing Senzo Mchunu with Ayanda Dlodlo at public works & administration is a potentially serious error for  the department that may do more in the long run for fiscal risk downsides — from the public sector wage bill and structural reform upsides from the agenda Mchunu started for deeper capacitation of the public sector. That said, putting him at water is very interesting — this is a hugely important ministry for SA’s climate resilience, a (quiet) ongoing success for Operation Vulindlela reforms going on in the background and, in future, the source of huge public sector investment to come.

Some moves provide relief, such as removing Stella Ndabeni-Abrahams from a messy tenure at communications. Yet she has now been imposed on small business development, which is potentially crucial for recovery from the unrest.  She is replaced by Khumbudzo Ntshavheni, a close trusted aide of Ramaphosa, yet what is that status meant to achieve? Resolving the spectrum issue is now about a complex unpicking of a legal mess created by the Independent Communications Authority of SA (Icasa), something the minister can ultimately do little about.

There was much relief with the reshuffle as the tension was building up in the commentariat, media and inside the ANC. But with the bar set far too frustratingly low, are the right people in the right roles to lift potential growth? No. Were the best available people in SA brought in? No. Was that possible? No, not under the current political rules. Were the best people possible within the rules deployed in the right roles? Hmmm. That is a hard question to answer. Maybe, though probably not. This is where the bar ends up on the floor — the tyranny of low expectations.

One day in future we will be in a place where whoever the minister is doesn’t particularly matter — corrupt minister, incompetent minister, investor-uncertainty stoking minister — because a decent director-general and civil servant team in each department would be a bulwark against the crazy merry-go-round. We are, however,  definitely not there in almost all departments. As such, who the minister is matters.

There is a paradox. The ANC says it doesn’t matter who is deployed. They are just there as humble servant cadres of the movement. Anyone who is there would (under instruction of and with oversight of the party) do the same thing. Yet this is, if I am being polite, a myth.  The personality of a minister sets pace and expectations. Either they are good at managing downwards and holding their department to account on an agenda — that they set in specific terms from the generalities of the ANC — or they are not.

Very few departments have the capacity, the history and the embedded institutional memory to shape their ministers. The National Treasury is probably the only real example.

This is where we are about to see an interesting tug of war.

Enoch Godongwana is an unusual incoming finance minister. Never before has a minister been so open for so long with investors and business — having come from the role of ANC salesman-in-chief to financial stakeholders (and economic transformation committee head). It is all here in the media record and in the notes and reports of investors: the positive views on coal, quantitative easing and industrial interventionism, but also the fiscal conservatism, backing of Operation Vulindlela and belief in the power and supremacy of the Treasury. He is notionally to the left of Mboweni but our King of Lucky Star was an outlier. Godongwana is still well towards the conservative end of the ANC spectrum. Yet he is somewhat to the left of National Treasury, and herein the battles inside Treasury will be interesting to watch.

The Treasury has seen a flight of human capital — to the Reserve Bank and elsewhere — in recent years and needs continual work to strengthen its intellectual battlements. The Treasury arm of Operation Vulindlela has shown what is still possible from the tower in Pretoria. But many new and complex battles are coming, including post-unrest policy and a basic income grant in particular. The Treasury needs to be battling these, in particular battling against the so-called inevitability of a basic income grant and other “obvious” but dangerous policies that are coming down the line.

The status quo at the Treasury is not enough though. It needs to quickly up its game and realise the opportunities for crowding in new climate funding on a massive scale for Eskom’s benefit, rather than being a passive regulator of Eskom’s funding activity. It needs a green-bond curve.  It cannot stand still.

Continually rebuilding the institution of the Treasury to make it fit for the future is therefore the ultimate task Godongwana will face, in addition to holding the fiscal line and the state-owned company line.

Overall, the drama of the reshuffle will eventually subside (after there is wider realisation that Mboweni was pushed rather than jumped). Will we feel like the narrative has been reshuffled somewhere new and exciting, or that this is still just the status quo?

A larger choice of ministers will be available after the elective conference at the end of 2022 and then the elections of 2024. That is a rather long time to wait, however, for the ministerial leadership to solve something like an unemployment crisis, an inequality crisis or an energy crisis.

Attard Montalto is head of capital markets research at Intellidex, an SA research-led consulting company.