Finance Minister Tito Mboweni’s biggest task when he delivers his maiden Medium-term Budget Policy Statement on Wednesday is to give assurance to not only the investor community and the markets, but to South Africans and the taxpayers.
Brand reputation expert Solly Moeng told Fin24’s Moeshfieka Botha in studio that Mboweni “needs to give us a sense of what is happening long term”.
He said people want assurance that the ship is slowly coming under the control of people they can trust.
“Investors don’t want to see two weeks ahead of us, they want to see long term. They want to know – are they going to place funds here, is it safe, is the policy stance clear or is it not clear?
“I think his job is to assure. His not going to change major policy here. Let’s face it, two weeks into his job, he’s going to read largely a presentation that was prepared by somebody else. Maybe he would have had 10 percent of it to influence with his own style.”
On style Moeng said everything relies on how Mboweni’s going to deliver his speech, but it’s not just the matter of style. “Style is important – but it’s a matter of content. Is he going to be credible enough, and is he going to be given the space to do what he needs to do?”
WATCH THE FULL INTERVIEW
Moeshfieka Botha (MB): Finance Minister Tito Mboweni is only two weeks into his job and yet he will have an unenviable task of delivering the Medium-term Budget Policy statement on Wednesday, the 24th of October. With us in studio, we have Solly Moeng a brand reputation expert who is going to chat to us about his speech. What, in this speech, do you think will be Minister Mboweni’s and what would be just what he has been given?
Solly Moeng (SM): Look, as you say correctly he’s two week into his job and he is somebody that people have confidence in. He has the experience of government and governance as previous governor of the Reserve Bank and labour minister and he is someone that’s not afraid to express his opinion.
People want to see somebody come into that position understanding what’s going on in the country, understanding what has been a biggest concerns of South Africans and the investor community .
He needs to come out and give us assurance that things will be fine. He needs to give us a sense of what is happening long term. Investors don’t want to see two week ahead of us, they want to see long term. They want to know – are they going to place funds here, is it safe, is the policy stance clear or is it not clear?
I think his job is to assure. His not going to change major policy here. Let’s face it, two weeks into his job, he’s going to read largely a presentation that was prepared by somebody else. Maybe he would have had 10 percent of it to influence with his own style.
MB: Minister Mboweni has really been interacting with society – and has become really popular with social media the last few days. Do you think that adds to the trust and to the likability factor that South Africans see in the Finance Minister? Bearing in mind that in the last couple of years, South Africans have been bitterly disappointed by many ministers?
SM: I think people like him because he interacts – but [former President Jacob] Zuma also interacts. They like him (Mboweni) because he’s very independent minded and he says what he thinks. I think more importantly he has not been linked to the Zuma state capture brigade. He is not part of that community.
While he was still out there he was courageous in saying what he thought was wrong about South Africa. So they hope to see him coming in to say: “I will not be part of the rot – and whatever rot that has happened we need to correct it. These are the things we want to put in place to make sure those things never happen again.”
People want assurance. The markets, South Africans, taxpayers – they want assurance that the ship is slowly coming under the control of people they can trust.
MB: Do you think that South Africans will get that tomorrow (Wednesday)?
SM: Well, he has not delivered a budget speech before, it’s the first time. Everything relies on how he’s going to deliver, but again, it’s not just the matter of style. Style is important – but it’s a matter of content. Is he going to be credible enough, and is he going to be given the space to do what he needs to do?
You must remember that finance ministers, like all ministers, serve at the pleasure of the president.
The serious policy direction doesn’t come from the minister, it comes from the president. So we hope that this president will allow him the space that he needs – with him having had enough time to look at what was going on from the outside to come in and say what has to stop.
MB: As much as we’re looking at the softer side of things, there are also the hard facts that we need to acknowledge, like the unemployment, the escalating debt, the corruption. Those are the things that need to be addressed to get the trust you are speaking of.
SM: That’s a very good point. Also, South Africans have been taking a lot of beating of lately, with tax hikes and fuel hikes – and the cost of living is getting really expensive.
Now there is a rumour that the ANC in government is thinking of another VAT hike, and Eskom is also asking for some 45% increase – it’s too much for South Africans. They cannot take it anymore.
We also know that the tax base is eroding. All the political negatives that we hear are scaring people away from South Africa. Not everybody who leaves South Africa makes a noise on social media about it, they just quietly go away.
So all these tax revenue collections targets that government has set are not going to be achieved. Even the former finance minister Nhlanhla Nene said it.
So he (Mboweni) needs to tell us where government is going to make cuts. We know that in government the labour force is overbloated and the ANC won’t allow any retrenchments before the elections but cuts have to happen somewhere. Government needs to find where – they can’t just shift existing funds, they need to make sacrifices. Where are the sacrifices going to be made? Are they going to be made at the cost of government or at the cost of the South Africans?
What has he got for us, both as investor markets and as South Africans? That’s what people are waiting to hear. Is there anything new that he is going to give us, instead of announcing that he’s going to take more and more from us in order to replenish the coffers that have be emptied through state capture?