Former Finance Minister Trevor Manuel has expressed concern that progress on economic reforms and the effectiveness of Operation Vulindlela are being hamstrung by a Cabinet that appears to be a "confederation of tsarisms" rather than a collective unit.

Speaking during a Centre for Development and Enterprise webinar this week, Manuel described the programmes being pursued by Operation Vulindlela, established by The Presidency and the National Treasury to accelerate the implementation of growth-supportive reforms,  as “very competent” and striking “all the right chords”.

“The worrying feature is that there is resistance even to Operation Vulindlela. And I think the problem is that you are sitting with a Cabinet that is not a collective unit – to me it seems like you are sitting with a confederation of tsarisms.”

As evidence, he pointed to the resistance shown by Mineral Resources and Energy Minister Gwede Mantashe to increasing the licence-exemption cap for embedded generation power plants  beyond 10 MW, despite  Operation Vulindlela “trying to drive a different agenda”.

It took the direct intervention of President Cyril Ramaphosa for Mantashe to eventually agree to increasing the cap from the 1 MW that prevails currently to 100 MW, following a groundswell of support within load-shedding-fatigued civil society for an increase in the threshold to at least 50 MW.

“And on a number of other issues, it seems like in this confederation there is competition,” Manuel added.

He highlighted, for instance, the seeming disconnect between Operation Vulindlela’s call for an accelerated return to commuter rail in cities and a lack of action by the Department of Transport “to get PRASA up and running and to ensure that the infrastructure, owned and operated by PRASA, is actually protected and secured”.

Manuel also made reference to a Business Day report on the recently announced South African Airways (SAA) deal, which suggested that the National Treasury had been bypassed and that the functions and responsibilities articulated in the Public Finance Management Act (PFMA) ignored.

“That’s not the way to proceed in building what the country needs to build.”

Public Enterprises Minister Pravin Gordhan disputed this argument, stressing in a statement that the process for selecting a strategic equity partner (SEP) for SAA was approved by Cabinet on June 9, following a rigorous, year-long process and the receipt of 30 expressions of interest for SAA and its subsidiaries.

“The Ministry has been transparent in communicating the milestones in the process to announce the preferred SEP for SAA,” Gordhan said, adding that, the process, which is proceeding in phases, would “entail compliance with the PFMA and other regulatory requirements”.

BUDGET WORRIES

Manuel also expressed disquiet, however, over whether Cabinet members were abiding by the Constitutional requirement that Ministers be “collectively and individually responsible” for all Cabinet decisions, including the Budget.

“The highest form of that collective responsibility just has to be the Budget,” he said, explaining that processes had been established in previous administrations to ensure that there was a system of progressive decision-making, whereby there was full consultation, across national and provincial government, on the Budget.

“So, by the time the Minister of Finance tables the Medium-Term Budget Policy Statement in October, and certainly by the time he or she would table the Budget, it’s owned by all of Cabinet; and everybody has to be bound by the decisions, because they were part of the decision-making process, which is run over the entire year.”

However, he saw worrying signs that Cabinet Ministers were not “giving [the Budget] their fullest backing”.

As evidence, he pointed to Ministers talking about the implementation of a basic income grant, without any reference to the Finance Minister, who, if consulted, would make it clear that it was not feasible to make a provision for the grant within the coming five years.

“It’s not that he doesn’t believe in the basic income grant, it’s that it’s not affordable in the current milieu – and if you want it you have to give up something else. That is the system of trade-offs that has to operate in the Cabinet room. And, in the absence of that it’s unbelievably difficult to understand how the system can work.”

Should Cabinet continue to operate as a “group of individuals” the quality of governance would be further undermined.

Manuel expressed concern that the reticence being shown to the implementation of the reforms being championed by Operation Vulindlela could even be political.

“I hope that it’s not occasioned by an ANC conference which comes next year, because my thinking on that is that, if you take the right decisions, the backing would be there and the victories would be secured, because there would be a groundswell of support for the right decision.

“You are not going to resolve these matters by trying to manage this in what we used to call smoke-filled rooms – there has got to be a different process that is not focused on transactions, but it’s actually focused on the centrality of policy and our Constitutional values.”

Decision-making should also take on board the “quality advice” being provided by structures such as the Presidential Economic Advisory Council (PEAC) and Business for South Africa (B4SA); advice that Manuel argued had not been fully integrated into the Economic Reconstruction and Recovery Plan (ERRP).

“Government cannot find itself with any shortage of good quality advice,” Manuel said, describing the PEAC’s November report as “very competent” and B4SA’s economic proposals “as very detailed and positive”.

These inputs were not fully reflected in the ERRP, which he argued remained short on detail.

“That’s a deep tragedy,” he lamented, arguing that “some synthesis would have been appropriate”.