Latest News Editor's Choice

News / Local

Ramaphosa appoints scandal-ridden Godongwana as finance minister

by Staff reporter
06 Aug 2021 at 10:15hrs | Views
South African president Cyril Ramaphosa announced 10 changes to his cabinet, including the appointment of close political ally Enoch Godongwana as his new finance minister.

Godongwana succeeds Tito Mboweni, who had held the post since 2018 and was a strong proponent of reining in the government's debt and wage bill.
The Economic Freedom Fighters (EFF) has strongly criticised it, likening his appointment to "putting a fox in charge of the hen house".

The party said that Godongwana's appointment was proof that Ramaphosa's talk about fighting corruption was just rhetoric.

In 2012, a commission of inquiry into investment company Canyon Springs, which loaned and lost R120 million of clothing workers' pensions funds, found that Godongwana, then the deputy minister of Economic Development, and his wife, were among those who were party to the carrying on of the business company either fraudulently or at least recklessly.

He quit that post in January 2012, after he and his wife were embroiled in a scandal involving the alleged misappropriation of funds from the South African Clothing and Textile Workers' Union pension fund.

As head of economic transformation in the ruling party, Godongwana last year proposed measures to bolster the economy that included the central bank financing infrastructure spending, a move that would place him at odds with Reserve Bank Governor Lesetja Kganyago if the idea was revisited.

The rand plummeted at much as 2.5% after Ramaphosa announced Mboweni's resignation late Thursday, but later pared the decline after his replacement was announced.

"It would be entirely wrong to think that fiscal discipline might be put at risk" by Godongwana's appointment, said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank.

"There is a strong team at the Treasury and Godongwana represents continuity and stability. His strength will lie in his ability to achieve a stronger consensus for reforms."

Ramaphosa also fired his defense minister and announced that the state security agency would be brought under the control of the presidency in the wake of the violent protests. The president last week said the so-called security cluster was ill-prepared for the violence.

The changes to the leadership of the security portfolios were decisive, while "fresh blood" was needed at the finance ministry, said Susan Booysen, director of research at the Johannesburg-based Mapungubwe Institute for Strategic Reflection.

Mboweni has "really not been showing much enthusiasm," she said. "Godongwana will really have to prove himself but we know he is a very loyal Ramaphosa ally. He knows that there are very, very urgent needs. The ANC's credibility depends on getting its economic policy right."
The EFF said that Godongwana lacked credibility, capacity and understanding of systemic structural challenges that continue to face South Africa.

Source - businesstech