Back in public finance and prepared ‘to do my bit’ – Nhlanhla Nene

You can also listen to this podcast on iono.fm here.

JIMMY MOYAHA: On Tuesday, 18 August, President Cyril Ramaphosa, in terms of Section 221 of the Constitution and Section 8 of the Financial and Fiscal Commission Act, appointed members of the Financial and Fiscal Commission to carry out their work over the next five years.

We are going to look at this in greater detail with the new chair of the commission, a gentleman we might all be very familiar with, who served a little under three decades as a member of the National Assembly. In that time he also served as deputy minister and minister of finance for the Republic of South Africa.

I’m joined on the line by Ntate Nhlanhla Nene to look at these developments and see if we can make sense of them.

Ntate Nene, lovely having you on the show. Thank you so much for taking the time. Allow me to be the first to say congratulations, curious congratulations that after almost a decade out of public service you have returned public finance. What prompted you to say yes? I suppose the call from the president could have helped that conversation along.

NHLANHLA NENE: Thank you, Jimmy, and greetings to your listeners.

Indeed, a very good question. I actually was looking at my very close retirement in the corporate [space], because in three years’ time I was going to be hanging up my boots, so to speak, in the corporate space.

When the call came, I was very reluctant to say yes.

But I felt it would not be fair not to make a little bit [more] of a contribution in my last few years, after having served the public in the past, and with most of the legislation in this space having been part of its drafting.

So I felt that if there is a need, and if they feel that I’m the right person to fix things, let me rather take up the responsibility and do my bit.

JIMMY MOYAHA: Ntate Nene, as the chair of the Financial and Fiscal Commission – I understand, of course, that the commission hasn’t had the opportunity to meet as yet – can you give us a sense of the directive that has been tasked to you and the commission by the president?

ADVERTISEMENT

CONTINUE READING BELOW

We know that this commission forms a critical part of policy and decision-making within our financial and fiscal policy framework. As the new chair, what objectives have been outlined to you that you and the commission aim to achieve – if you can share some of those?

NHLANHLA NENE: Look, maybe let me start by making the disclaimer that I actually haven’t even set foot in office. Even the formalities have not been finalised with regard to my onboarding – except for the announcement and, of course, that I have accepted the appointment.

But as you’ve correctly pointed out, this is a critical institution in our fiscal framework, which is established in terms of Section 220 of the Constitution and the Financial and Fiscal Commission Act 99 of 1997 – with a few amendments.

But our primary objective is to actually advise parliament and also to make a meaningful contribution in the crafting, especially of the division of revenue among the spheres of government.

That’s a very important area because in executing its fiscal responsibilities, those things have to be taken into account.

These are challenging times indeed, with the tight fiscal space – but at the same time the ever-growing needs of society and also the challenges with regard to how those finances are deployed and spent finally.

So we have a responsibility to make sure that our research is also enhanced to give real, real effect to sound advice that would make sure that we are able to advise committees and advise even state organs that are responsible for spending and receiving public funds.

JIMMY MOYAHA: Ntate Nene, before I let you go, I want to look at what the commission could potentially bring to an all-important conversation that will be taking place – about which we anticipate having some feedback in a couple of months.

We had confirmation from the minister of finance at the start of the year, when he tabled his budget speech, that we will be getting a principle-based fiscal anchor by the Medium-Term Budget Policy Statement. I understand, of course, that your role has yet to take effect here, but I’d like you to put on the other hats that you’ve previously worn and draw on the experience that you’ve had as minister of finance, and perhaps give us some light on how the introduction of this principle-based fiscal anchor could be aided by the commission in whatever space.

You have an understanding and appreciation of the role that this commission did under your tenure as finance minister. What are you hoping you can contribute to solutioning towards this fiscal anchor?

NHLANHLA NENE: Indeed. Even though I don’t have the details as yet, such discipline in that space is quite relevant – and it’s required.

It couldn’t have been required at any time but now because, as you would know, in the monetary space you have your inflation target as your anchor of monetary policy.

ADVERTISEMENT:

CONTINUE READING BELOW

Therefore I think it is critical that on the fiscal side you also do have something that brings about that kind of discipline.

That discipline should not restrain or restrict spending.

It should actually provide the necessary safeguards in terms of how resources are deployed and how resources are spent, and also make sure that there is a meaningful impact of those resources where it matters most.

JIMMY MOYAHA: Ntate Nene, you find yourself on the other side of a conversation, now that you are in an advisory capacity on the commission. In the past you have been in an advisary capacity – receiving the advice from such a commission. Are you at all concerned that being the one to provide the advice might be a different conversation, perhaps, with the current finance minister and any other finance minister who may come after this?

NHLANHLA NENE: Well, that has been the story of my life.

When I was a member of parliament, I was holding the minister of finance to account. And when I became deputy minister – after passing legislation that gave powers to parliament to scrutinise and amend budgets – I found myself in the ministry. [Chuckling]

So it is the story of my life, changing roles.

And when the power relations change, the responsibility is that of actually making sure that we have one main objective – that of a successful South Africa.

And in building our economy, I think at times whatever experience and skills you have developed in another role do come in handy in the other role, because you have an understanding of how the other side operates.

JIMMY MOYAHA: In building a proper and worthwhile South Africa it is important to lend yourself to public service, wherever you may be called upon to do so.

All the best to you, kind sir, and to the commission that has been appointed by the president. That is the Financial and Fiscal Commission that has been recently announced.

We have just had a conversation with the chair of that commission, Ntate Nhlanhla Nene. Thank you so much, sir, and all the best to you and the team.

#public #finance #prepared #bit #Nhlanhla #Nene