Opinion
South Africa: The removal of Finance Minister Nhlanhla Nene is bad news for the country
But to maintain this newly won authority, the quality of management offered by the revamped National Treasury was critical.
What have been the National Treasury’s two biggest achievements since democracy?
It is difficult to narrow it to two: but the most obvious achievements were the introduction of a spending framework that encouraged better planning; called the medium term strategic framework, supported by the Public Finance Management Act and the Municipal Finance Management Act; and the major repair job of our tax system, which became the South African Revenue Service.
Better tax collection and more skillful spending led to much greater budgetary discretion in the 2000s, which allowed for political imperatives to be addressed.
What have been its two biggest failures?
One that comes to mind is the integrated financial management system, a centralized and comprehensive software system that was intended to replace the Basic Accounting System. This was hugely over budget and massively behind schedule.
Another was the relative looseness of budgeting in the mid-2000s which meant that the cushion the country had when the 2008 financial crisis hit us was not thick enough. It was politically very unpopular to run a budget surplus, and politically impossible to introduce a strict budget rule.
Thirdly, it could be argued that the introduction and implementation of the home-grown structural adjustment program; the Growth, Employment and Redistribution (GEAR) program in 1996 could have been better managed.
What does the appointment of the new minister mean for the future of the National Treasury, and for the country?
Minister Nene was an excellent finance minister who managed the budget carefully and stood up bravely when risks to our financial integrity appeared. Statements made by ratings agencies last week hinted that Nene stood between South Africa and junk bond status.
