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A Gemini in the finance ministry

After embarrassing myself during a meeting by displaying my total ignorance about Enoch Godongwana I did a little research, including dialing in to a global investor call set up by Standard Bank and HSBC to introduce South Africa’s new Finance Minister.

On the call, he was introduced by Treasury Director-General Dondo Mogajane as very much a known entity in the ANC and at the Treasury. Mogajane said there had hardly been a week in the last 2 or even 3 years when he and the new finmin, in his role as head of the ANC’s economic transformation committee, had not talked.

Enoch Godongwana

Godongwana himself reiterated that he was not a new kid on the block (anyone who wonders about the relevance of this line in the narrative should look up the ‘Weekend Special’ finance minister Des van Rooyen).

Fitch, the global credit ratings agency, was quick to make a statement to the effect that the country’s fourth finance chief in as many years was expected to be a steady hand, and even that Godongwana could bridge the policy gap between the party and the state.

So he is well-known in political, economic, business and investor circles.

Much different from Tito?

“Difference in style but not in substance,” Godongwana said on the call, in what he called his “opening shots”. He seems confident, knowledgeable, and relaxed to the point of being playful. So far, so Tito.

He was quick to assure everyone that the focus will remain on fiscal consolidation. He promised policy continuity, saying he is committed to the Treasury’s existing fiscal framework and spending restraint.

“I will be sticking to the sustainable fiscal path he [Tito] has chosen,” Godongwana said. “The fiscal framework is to some extent sacrosanct. I don’t see much changing in that fiscal framework.”

He talked about a significant boost to tax revenues from the commodities boom, and he highlighted the fact that SA’s crippling borrowing costs were coming down thanks to borrowing “at the shorter end of the curve”, which is fiscalese for borrowing costs coming down.

He also pointed to recent moves on allowing self-generation of power and freeing the country’s port authority from being in the stable with its landlord (Transnet), two under-reported changes that promise, surely, to have a huge magnifying effect in this time of commodity boom.

BACKSTORY
Godongwana was appointed Minister of Finance in President Cyril Ramaphosa’s long-awaited cabinet reshuffle, which took place on 5 August 2021. While many of us were sad to see Tito Mboweni go, few were surprised. He really had done is duty and has headed off into the sunset at Magoebaskloof. (A good day for avocado futures.)

As for Godongwana, much has been made about the ‘cloud’ hanging over his head since 2012 when he resigned as the Deputy Minister of Economic Affairs. At the time, there were questions about a stitch-up in the form of a R87 million loan from the SA Clothing and Textile Workers’ Union pension fund to Canyon Springs, an investment company partially owned by the Godongwana family. Canyon Springs was liquidated before the loan (ie clothing workers’ pension savings) was paid back.

It has been less widely reported that the union has confirmed that it had reached an agreement with Godongwana in 2017, and that he paid back the money (the amount required by the deal, which included interest). Also that Godongwana has said the reason he resigned was so as not to “taint the office”, which seems unusually honourable for anyone in a Zuma government.

Not that this government is anywhere near squeaky clean …

Besides, Godongwana holds various senior executive positions, not least among them chair of the Development Bank of Southern Africa, that would have required intense vetting and scrutiny.

A look at Godongwana’s pedigree shows ticks in all the right boxes, local and international. He was born in Cala in the Eastern Cape and matriculated from St John’s College in Mthatha, he cut his teeth in the union movement and has an MSc in financial economics from the University of London.

He is also a Gemini (born 9 June 9 1957) so, we are told, we can expect some creativity too.

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