The inevitable collapse of Treasury, the last and most important institution, which has thus far acted as the bulwark against vultures circling on South Africa’s purse, has been triggered.
With his ill-advised and populist plan to instruct Treasury to find R40 billion for free university education, President Jacob Zuma has precipitated Treasury’s slide into mediocrity.
Zuma’s actions have forced budget deputy director-general Michael Sachs, a senior and experienced civil servant, to throw in the towel and announce his sudden and unexpected resignation this week.
Following Zuma’s cabinet reshuffle which displaced former finance minister Pravin Gordhan in March, former executives like director-general Lungisa Fuzile and deputy director-general Andrew Donaldson, who headed the Government Technical Advisory Centre (GTAC), an agency which Treasury established to offer support to its public finance office, also left the institution.
A senior government executive this week told me that while Michael was unhappy with the changes at Treasury, he had wanted to give Finance Minister Malusi Gigaba a chance.
Zuma’s desire to find R40 billion to fund free tertiary education was not inspired by the goodness of his heart.
It is a self-serving move aimed at prolonging his political life which has reached its twilight zone.
But unfortunately the move will result in the disemboweling of Treasury, in similar fashion with what has happened in many government departments and institutions including the South African Revenue Service (Sars), the Hawks, the National Prosecuting Authority (NPA), the SA Police Service and its crime intelligence unit, and the State Security Agency (SSA).
In order to understand what is currently happening at Treasury, it is important to take a step back and reflect on what happened at Sars.
In September 2014 Zuma appointed Tom Moyane, his close ally, as Sars commissioner. Shortly after Moyane’s arrival, he purged senior Sars executives Ivan Pillay, Johann van Loggerenberg, Gene Ravele and Peter Richter.
Other than these senior executives, whose collective tax collection experience spans over 70 years, more than 100 senior Sars managers left Sars.
In an exclusive interview last month, Gigaba told City Press that the R50 billion hole in the Medium Term Budget Policy Statement (MTBPS) was, partly, as a result of management problems at Sars.
This can be directly linked to the departure of experienced executives at Sars.
The people (bless them) which Moyane has appointed to senior positions may be experienced in other fields, but do they have a clue about tax collections, a very complex and complicated environment?
Your guess is as good as mine.
Zuma’s disemboweling of other institutions like the Hawks, the NPA, the SSA, and the police and their crime intelligence unit is purely aimed at making him dodge jail time.
But this has led to dramatic consequences for all South Africans.
The upshot of Zuma’s moves was ventilated in recent books by retired journalist Jacques Pauw in The President’s Keepers, former top cop General Johan Booysen’s Blood on Their Hands, and Rogue: The Inside story of Sars’s Elite Crime-Busting Unit which was written by Adrian Lackay and Johann van Loggerenberg.
A senior Treasury executive told me on Tuesday that the morale as Sars was at an all-time low.
“There is quite a lot of people who are waiting to see what will happen at the ANC’s conference next month – if something doesn’t give, they will leave. Remember that working for the Treasury is good for anyone’s CV. Once you have worked for Treasury, you can get a job at any financial institution in the private sector.”
The official went on to say “Zuma’s R40 billion free education gaffe is not a joke, it has thrown many officials over the edge. Some of these officials have realised that Treasury is simply no longer in control of the budget process. Zuma’s recently announced fiscal commission is in charge”.
If Zuma’s push to avoid jail time at all costs has resulted in a R50 billion hole at Sars, an increase in serious and violent crimes as a result of a domesticated police service and its crime intelligence unit, and selective prosecution due to a captured NPA, imagine what will happen to Treasury.
Until recently, Treasury has been the last line of defence against those who want to raid the purse.
But should South Africans allow Zuma to do with it what he has done with other institutions, the lack of skills and experienced officials will harm South Africans badly.
Not only will thugs declare open season on tenders and procurement, but it could all lead to the discrediting of Treasury, and the entire budgeting process.
Investors will certainly flee, ratings agencies will downgrade the country and the only option will be bailouts and loans from the International Monetary Fund, which may impose strict conditions, including the reviewing of social grant policies.
South Africans, you have been warned.