Briefing Notes: Gigaba Takes His Message To Black Business

The new minister of finance needs to navigate the treacherous waters of competing interests. His speech to the Black Business Council showed it won't be easy.
Finance Minister Malusi Gigaba addresses a news conference in Pretoria, South Africa April 4, 2017.
Finance Minister Malusi Gigaba addresses a news conference in Pretoria, South Africa April 4, 2017.
James Oatway / Reuters

ANALYSIS

Finance Minister Malusi Gigaba is starting to feel the pinch.

Wading into the ballroom at the posh Regency Hyatt Hotel in Rosebank on Monday night, where the Black Business Council (BBC) held their annual dinner with him as top billing, he had to navigate the desires of Mzwanele Manyi from the Progressive Professionals Forum and those of Lwazi Bam, the chief executive of Deloitte Southern Africa.

The former is an ardent proponent of radical economic transformation that includes wholesale changes to South Africa's economic structure, our constitutional dispensation and our social compact. The latter is part of a global multinational financial services firm, responsible for the management of billions of rands and dispensing advice that stimulates economic growth. His business thrives on economic predictability and political stability.

Their interests, sometimes converging, are mostly starkly divergent.

Gigaba, almost seven weeks into his new deployment, made three acknowledgements from the stage before he began his speech: to the BBC's executive, the Russian trade representative and Manyi, who went around working the room like Donald Trump does every weekend at the Mar-a-Lago dining room. Only with a bigger grin.

It would be unfair to judge Gigaba (according to businesspeople in attendance at the Hyatt he is still "learning a lot") to judge him purely on his rhetoric. But it is important to take note of what he is saying and to whom he is saying it.

At his first press conference as minister he pledged fealty to "radical economic transformation". His message at the World Economic Forum (WEF) was about fiscal responsibility and that "nothing will change". He told MP's last week how public procurement will have to be redesigned. And at the BBC his message was that South Africa needs to remain competitive.

As finance minister he will be buffeted from all sides by special interests, rentseekers and economic theorists. Given his lack of experience not having risen through the ranks in the finance family like his immediate predecessors and their deputies, he is bound to be more impressionable. Former finance ministers Pravin Gordhan and Nhlanhla Nene were faced with the realities of fiscal discipline, international borrowing, budget deficits and growth constraints every day of their life since the late 1990's -– Gordhan as commissioner of the South African Revenue Service and Nene as chairperson of Parliament's standing committee on finance. It wasn't new terrain to them when they ascended to the ministry.

The political economy surely must be the most contested terrain in the country, bar the national race debate.

Sebulela, in his opening remarks on behalf of the BBC, sounded worried about the nuclear deal, the country's junk status and general economic uncertainty.

Danisa Baloyi, however, the president of the BBC, launched into a tirade about the Sunday Times' reporting of her WhatsApp messages that allegedly made light of South Africa's relegation to junk status. "I never meant that," she said.

And Philisiwe Mthethwa, the chief executive of the National Empowerment Fund (the evening's chief sponsor) said: "We want radical economic transformation, not inclusive growth!"

Gigaba, dressed in a three-piece suit and a beaming smile, used a teleprompter and spoke for exactly 31 minutes. His message was rooted on economic orthodoxy (decent jobs would lift people out of unemployment, for that to happen the economy must grow, for the economy to grow it must be competitive and diversified and South Africa must maintain a global outlook), but the underlying national debate was also reflected in his nine-page speech.

In his opening salvo Gigaba spoke at length about the structure of the economy, emphasising that it is based on the inherited colonial and apartheid framework. This has led to enormous disparities in wealth and inequality. Of course, this isn't new, as Gordhan and Nene also explained during their tenure.

But what was striking was Gigaba's distinguishing between "white" and "black". He wants "black" business to partner with "white" business. He also has a gripe with "black corruption" versus "white corruption", where the former is seen as a mortal sin while the latter gets away with it.

"White business", the audience was told, must champion and embrace "the transformation project and step forward in all aspects of broad-based balck economic empowerment".

Gigaba told the BBC what it wanted to hear: the state's procurement budget will be used to empower black business and the time for fundamental economic restructuring has come ("we must stop justifying it").

His problem –- which he did acknowledge –- is that the economic environment is dire: foreign debt is high, our investment status has been shot to pieces, business confidence is low and levels of political gerrymandering is high. Plus, Gordhan's budget is still the law of the land.

When Gigaba concluded his speech he stepped off the stage, politely shaking Sebulela's and a couple of other hands at the table nearest to the podium.

Then Manyi stepped forward and Gigaba grabbed his hand and they both moved in for a brotherly shoulder bump, laughing and backslapping each other. And then the party began.

Deloitte's Bam listened to the speech, briefly spoke to some colleagues and left the event before the dinner meal of beer and honey braised lamb was served.

Our post-Gordhan era is starting to take shape.

** Consensus among business leaders was that "Gordhan got what was coming to him". He should never have put himself up against President Jacob Zuma.

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