Following the announcement of his reappointment as Minister of Finance, Pravin Gordhan released a statement acknowledging his previously experience in the role, and his focus as minister of finance for the coming months.
“I return to a portfolio that was assigned to me for five years between 2009 and 2014. I have been associated with the Finance Family for almost two decades. I am relatively familiar with the terrain and its challenges,” said Gordhan.
According to Gordhan, following the impact that the removal of Nhlanhla Nene is the role and his replacement by relatively unknown David Van Rooyen has on the economy, the government, spurred on by the financial impact, and responded by trying to stabilise the situation by reinstating Gordhan to the post.
Gordhan has appealed to the country to work with the government and National Treasury “to build a resilient economy and a better life for all South Africans in the context of a challenging global, emerging markets and domestic economic environment.”
There are several points that Gordhan revealed will be the focus of the Treasury in the coming months. These are:
- Staying the course of sound fiscal management. “We will unreservedly continue our fiscal consolidation process and we will stabilise our debt in the medium term. If needs be, we will accelerate this by either cutting spending or making selective changes to tax policy. Similarly, any revenue raising opportunity will be considered very carefully to ensure that it does not damage growth or affect the poor negatively,” said Gordhan.
- Pro-poor programmes with not be cut, and neither will growth inducing programmes and investment. According to Gordhan, treasury will increase investments in the 2017 budget.
- Efforts will also be exerted to ensure efficiency of expenditure across the public service, with new measures being put in place to help reduce corruption, as well as to increase transparency.
- The impact of state-owned companies on the fiscal framework needs to be examined. Gordhan emphasised that support to these companies will be carried out in a fiscally sustainable manner, with work already starting on a uniform legislative framework to regulate state-owned companies.
- The commitment of government to strengthen the link between policy formulation, budgeting and performance.
- Working together with the South African Reserve Bank (SARB), Treasury will be intensifying and accelerating the pace of financial sector reforms. “A stable financial sector is central to oiling the real sector of the economy. As a caring government we fully appreciate our duty to protect all those invested in our economy. We will always act to protect the pensions invested in our bonds, equities and other forms of stocks,” said Gordhan.
Furthermore, Gordhan revealed that Treasury will be intensifying its “cooperation and partnerships with the private sector to improve investment so that [they] can achieve higher rates of growth.”
He added: “We recognise that to do this, we need faster and more inclusive growth and job creation. A growing economy creates work opportunities, and 5.4 million South Africans need work. A growing economy delivers tax revenues which we need to finance various programmes of the State and to effect redistribution so that we can reduce inequality and poverty. The centrality of growth to achieve our policy objectives is paramount.”
Gordhan also noted the concern that many have, regarding the rating agencies that recently downgraded South Africa, however, with Treasury, he will “endeavour to protect the investment grade rating of South Africa.”