Pravin Gordhan has managed to maintain fiscal discipline and inflation-targeting in the midst of tough global conditions, which is impressive. He has also earned praise for his measures to clamp down on public debt in his medium-term budget policy statement, sending a message to investors and credit-rating agencies that South Africa intends following a prudent fiscal path, which includes reducing the government`s debt.
Unfortunately, the treasury`s downward revision of South Africa`s gross domestic product growth rates, to 2.5% from 2.7% on his watch, raises concerns about the country`s long-term growth.
Gordhan continues to take a strong stance on corruption. His intervention in some provinces has exposed weaknesses in the government`s supply chains and sent a strong message to officials about the national government`s intolerance of corruption. Whether the intervention will address systemic problems remains to be seen.
Gordhan`s serious weakness has been his inability to influence economic policy,
particularly in terms of economic and regulatory reform. This raises questions about who is in the cockpit of the economy.
Gordhan has been seriously hampered by ideological battles in the Cabinet and noticeable differences of opinion with tripartite alliance partners around policy. This is demonstrated by the minister`s calls for regulatory reform and the reduction of red tape for small businesses, which have largely been ignored.
The Gauteng e-toll dispute and opposition by Cosatu to Gordhan`s calls for labour market reforms to increase job creation are also cases in point, as is his failure to implement the youth wage subsidy in April as planned, again because of opposition from Cosatu.
Adverse findings by the auditor general with regard to the treasury`s audit outcomes over the past four years continue to be an embarrassment. It means the treasury is not leading by example with regard to reporting to the compliance framework it set up.
On a positive note, the minister`s banking regulatory model has been well received and is expected to be implemented in the next year and a half.
This will result in separate institutional and consumer regulations with the treasury retaining responsibility for overall policy implementation.