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'Fears in finance policies baseless' - Treasury

Economy
Durban - Deputy Finance Minister Sfiso Buthelezi has described as baseless fears that the recent changes in the ministry would herald a change in policy.

Buthelezi has dismissed suggestions that the new leadership at the National Treasury would bring about policy changes.

“Where does this come from? Policy does not depend on individuals. The finance minister [Malusi Gigaba] has been part of the cabinet for about 13 years. He has been in the national executive committee [of the ANC] since Mandela’s time. I have been in the ANC for as long as I can remember,” he pointed out.

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Malusi Gigaba and Pravin Gordhan

Buthelezi replaced Mcebisi Jonas as deputy finance minister in President Jacob Zuma’s sweeping cabinet reshuffle which also saw Pravin Gordhan axed.

The reshuffle resulted in the rand plummeting against major currencies and international ratings agencies S&P's Global and Fitch downgrading the country’s sovereign debt to junk status, resulting in banking stocks shedding nearly R20 billion in three days.

Buthelezi and Gigaba have tried to calm investor jitters. Buthelezi was part of the Treasury team that travelled to the US last month for the World Bank and the International Monetary Fund spring meeting. He said that there were clear policy formulations and budget processes “from the ANC to the cabinet and Parliament”.

Unemployment

Buthelezi reiterated the Treasury’s commitment to inclusive growth, saying the economic growth prior to 2008 did not benefit the majority of South Africans, hence it was termed jobless growth. “Even in that boom, you had many people locked out of the economy. It was a concern,” he said.

“South Africa has one of the most unequal societies in the world. Because of the high levels of inequality, the majority of South Africans do not enjoy the fruits of freedom. Political freedom without economic freedom is incomplete.”

Buthelezi said the concern about inequality was not peculiar to South Africa and cited similar views by organisations such as the World Economic Forum, Oxfam and the World Bank. In January, Oxfam said in a report that eight men owned the same wealth as the 3.6 billion who make up the poorest half of humanity.

Read also: 'Junk'-rated debt could cost more than $10bn in lost funds

Buthelezi said the continuation of the widening inequality undermined democracy.

He said the government was concerned about the rising unemployment, especially the lack of jobs for the youth while the high levels of unemployment could lead to instability. “When the economy is unstable we cannot attract investors.”Buthelezi also weighed in on the government’s push for industrialisation, saying the country should not be content with exporting raw materials while importing finished products.

“We must create the value here, so that we can grow the cake. Black people want to be part of the efforts to grow the economy. You cannot say let’s grow the economy first and include them later. Black people must be involved now."

He added that, as it rolls out infrastructure investment in the next three years, the government wanted the major infrastructure companies to incorporate black economic empowerment counterparts.

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