Can Godongwana stare down the ANC on a basic income grant?

What has become clear over the past three years is that Ramaphosa’s approach to reform is about plucking the low-hanging fruit, rather than implementing deep structural reforms

Finance Minister Enoch Godongwana. Picture: GCIS
Finance Minister Enoch Godongwana. Picture: GCIS

Enoch Godongwana’s charm offensive has started. On Friday, the National Treasury introduced him to the financial markets and the ratings agencies, as per tradition. 

There are no signs this meeting went badly wrong — as it did in 2017, when Malusi Gigaba was introduced as the new finance minister.

In Gigaba’s case, it all went pear-shaped pretty quickly. The market wanted guarantees that the country would stick to its fiscal commitments, and this was not the kind of language or questions he was primed for. We now know, thanks to his estranged wife, that tailored suits and tog bags were more his thing than finance. 

Godongwana, however, is no stranger to the market. He has been in the set-up for two decades, first in the outer ring during Trevor Manuel’s era, as the MEC for finance in the Eastern Cape from 1997. Since then, he has led the ANC’s economic policy thinking for more than a decade — which placed him on the fiscal radar screen.

In the honeymoon phase, at least, Godongwana has the ability to charm the socks off the market: he oozes charisma and is au fait with economic policy. 

Critics reckon he’ll be able to build more political bridges than his predecessor, Tito Mboweni, which would give the reform agenda some impetus. 

By comparison, Mboweni had no time for bad ideas and didn’t mince his words when dealing with the political marketplace. Godongwana has a dexterous approach to ANC factional politics, with more links to the tripartite alliance partners than Mboweni had. 

While Mboweni didn’t care about persuading anyone who didn’t agree with his economics, it helps that Godongwana has historical ties to the communists and the trade unions, even if his economic approach is more pragmatic. The only semblance of “red” left in Godongwana is the feather on his fedora hat.

Nonetheless, that’s only part of the picture. 

Godongwana joins the finance portfolio at an interesting time: the global economic recovery has ignited a commodities rally, which will boost revenue collection and give the Treasury some breathing space in the next two years. 

But it’s what the government does with this breathing space that is more interesting. 

The demand for money from his cabinet colleagues isn’t likely to recede, and right now, there is fighting talk of introducing a basic income grant (BIG). President Cyril Ramaphosa has given the idea the nod at the conceptual level, while Godongwana was more nuanced when he told the Sunday Times that any BIG should not be seen as a one-size-fits-all miracle cure for SA’s ills. Instead, he spoke of a varied approach, where vulnerable unemployed young people — mainly black — would get both a grant and skills development.

We can’t condemn young people to a cycle of dependence, particularly because these are young black kids,” he said.

This anti-dependency argument is an old one — but when you consider that the state pays almost 20-million social grants every month, you can see just how seriously the government takes this argument.

That history alone suggests Godongwana will face plenty of resistance should he not agree to a BIG, including from the unions and civic organisations. 

We actually don’t know much about his version of a BIG, other than the sound bites he’s given us so far. But he did tell the Sunday Times: “I can’t, in good conscience, be opposed to the BIG and related mechanisms to help people in dire need of social support.  There are varied categories, including the youth, who need more than just a grant and social support. We must not lump these people together with the rest of the population. We need varied mechanisms.”

From all those nuances and contradictions, it’s hard to divine a concrete trajectory.

But the problem he faces is that his cabinet and the entire ANC are looking at the local government elections, and looking for a way to avert a popular uprising — and they won’t have time for, or interest in, a nuanced policy.

What has become clear over the past three years is that Ramaphosa’s approach to reform is about plucking the low-hanging fruit, rather than implementing deep structural reforms. But if Godongwana is to make a lasting impact, he will need to look beyond just the short term, and stare down his party’s approach to development.

The ANC’s Band-Aid approach to social and economic policy is well entrenched. I doubt you can change it from within the Treasury — but it’s as good a place as any to try to inject a new way of thinking into the government.

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