Business

“State ownership of SOE’s is not a religion”: Mboweni

By Bloomberg 26 March 2019
Caption
Finance minister Tito Mboweni delivers his 2019 budget speech in Parliament on February 20, 2019 in Cape Town, South Africa. Mboweni, a former SA Reserve Bank governor delivered his first annual budget speech as minister of Finance amid socio-economic and political issues in the country. (Photo by Gallo Images / Jeffrey Abrahams)

Finance Minister Tito Mboweni has once again said a discussion must begin on whether the government needs to retain control of all the assets it owns given the poor state of the national finances.

Mboweni has asked Minister of Public Enterprises Pravin Gordhan for a list of non-core state assets and has been provided with an “extensive list,” he said while being interviewed and answering questions from callers on Power FM radio.

“One should be careful not to elevate state ownership to a religion,” he said.

Mboweni, a former central bank governor who took office in October, has repeatedly questioned the logic of holding onto loss-making state companies, raising the ire of the labor union allies of the ruling African National Congress that oppose privatization. Plans to restructure state power company Eskom Holdings SOC Ltd. are already being opposed by unions.

Mboweni said that the country should look toward merging its state-owned airlines to remove the need for duplicate boards and chief executives officers and could sell the explosives unit of state arms company Denel SOC Ltd. to AECI Ltd., a privately owned explosives company.

The finance minister also said that a new commissioner of the South African Revenue Service will be appointed next week and a new board for the Public Investment Corp., which manages the pensions of South African state workers, will be constituted within two weeks. Both institutions have been embroiled in scandals.

Once the current set of challenges facing the National Treasury have been resolved, Mboweni said he would like to return to the private sector. Mboweni has served as chairman of AngloGold Ashanti Ltd. and as an adviser to Goldman Sachs Group Inc.

“I am on public record saying it is time for old people to retire and it is time for young people to run the country,” said Mboweni, who is 60 years old.

While Mboweni is liked by business his departure won’t cause upheaval if there is a suitable replacement, Martin Kingston, the outgoing chief executive officer of Rothschild & Co.’s South African unit said in an interview.

“No minister is indispensable,” Kingston said. His departure would be accepted by the market “as long as the transition is to someone competent, capable and qualified and he is all of these. I don’t think since 1994 that any minister of finance has had such a challenging set of circumstances.”

Mboweni also called for stronger action against those who committed corrupt acts during the tenure of former president Jacob Zuma, saying that what happened at the national revenue service was “treasonous.”

DM

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