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Finance Minister Malusi Gigaba has said the government will be introducing a new policy framework next year to regulate how government guarantees are provided and used.
Gigaba, who addressed the ANC Business Breakfast event on the first day of the national conference held at Nasrec, said government guarantees should not be used to bail out parastatals whose management continued to run the entity down while the board did nothing.
“Next year we are going to introduce a new policy framework that’s going to be more stringent on how government guarantees are provided,” he said, also pointing out that the days of guarantees being used for incentives would also be coming to an end.
Gigaba also said Treasury was already in talks with Mineral Resources Minister Mosebenzi Zwane over the declining levels of production in the mining sector, which has mainly been blamed on the hostile relationship between the state and the mines represented by the Chamber of Mines.
The mining production in the country has experienced a downward spiral throughout the year, leaving a notable dent on the GDP, but the agriculture sector performed well, saving the day.
“Agriculture has been doing the heavy lifting alone without mining. We need to acknowledge that it could have done better. We are talking to Minister Zwane that we have to resolve the stalemate between government and the mining sector,” he said.
Gigaba admitted that Eskom remained the biggest risk to the economy and that he supported National Energy Regulator of South Africa’s decision to refuse to grant Eskom the 19.9% tariff hike it sought and instead approved 5.23%.
“I support that decision. There’s no way we are going to give Eskom a 20% increase in an environment of low demand and slow growth,” he said, adding that financial unsustainability of the power utility was not a shareholder’s problem to deal with and the burden should not be placed on the consumers.
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