Nene vows to forge ahead with the NDP

Zuma's new finance appointee may be a political lightweight, but he says he is quite happy to 'swim in the deep', writes Chris Barron

Nhlanhla Nene says he had "no idea" he was about to be made minister of finance until he got a midnight call from the Presidency last Saturday.

"It came as a shock", he said after returning from the Africa Rising conference in Maputo on Friday.

"Usually one would get a call much earlier," he said.

The last-minute nature of his appointment suggests that the decision to end Pravin Gordhan's term as finance minister was not easily or readily taken - and was almost certainly not part of a well-thought through process.

Nene, 55, is well liked and highly regarded as a technocrat who knows the finance portfolio inside out. He has had long exposure to the portfolio both as a member and chairman of the parliamentary finance committee and as deputy finance minister since 2009.

He is known to be deeply committed to the macroeconomic philosophy of his two powerful predecessors, Trevor Manuel and Gordhan, and was closely involved in implementing it.

For that, at least, there has been a huge sigh of relief from analysts and economists.

But compared with Manuel and Gordhan, he is a political lightweight. There is serious concern that he lacks clout, and may not have the political support from senior ministers and the president to push through politically unpopular measures.

"I may not have the political clout, but I have the political will," said Nene. "I am quite happy to swim in the deep.

"I fully appreciate the weight of the task I am faced with."

Will he have the necessary support to lay down the law on government spending, which at a time of shrinking economic growth will be more critical than ever?

"I trust that my organisation and the cabinet and entire leadership is surely behind my appointment, and understand that it is in the interests of the country that we do what is right," he said.

He accepted that the politics around his position will be a challenge. "Yes, because we're playing in a political environment." But he said he was not stressing about it.

Nene is quick to use the global environment as an excuse for South Africa's problems, but agreed, though only in part, with the International Monetary Fund's assessment that local structural factors were more to blame.

"The nondiversification of our economy means that if mining is in a crisis, you will immediately begin to see an erosion of our growth. It is something we should be alive to."

He is worried about the "lack of political leadership" in resolving the crisis in the mining sector.

"This is indeed concerning. We need a resolution to the crisis, and that is going to take strong political leadership. We are committed to that," he said. "It is in no one's interests to drag this thing on. That is why we are having an interministerial initiative as we speak. I trust it will deliver the desired outcome."

Nene said it was time that regulations "fought for and hard won" brought order to industrial relations and were "respected by everyone".

Nene knows he will be up against powerful cabinet colleagues who may not share his sense of urgency about implementing the National Development Plan (NDP).

His attitude is that they agreed to it - and now must walk the talk.

"I would want to believe that the NDP has been adopted by cabinet, and very few of the ministers in cabinet are new. Most of them are the same ministers who adopted the NDP. Plans to implement it are already out there. All that we are focusing on now is expediting the implementation of elements of the NDP. The president has already indicated that the implementation of the NDP is at the centre of his plan going forward."

Gordhan fought hard to contain government spending, and in the end this may have cost him his job. Nene said he would continue the battle.

"We have every reason to sustain that effort to live within our means. We live in a very strained economic environment, and no one can pretend that you can spend as you wish."

Nene said he would also continue to push departments to make more productive use of the money they spent.

"We need to stretch every rand to achieve our objectives."

His first major battle to contain government spending will be next year when public sector pay negotiations begin again.

He said he hoped everybody involved in the negotiations would "take into account the interests of the country rather than narrow selfish interests".

''No one would want to run the country down by spending more than we have."

But Nene said care had to be taken not to overdo government spending cuts. "You don't want to cut expenditure to the point where you stifle the economy."

Raising taxes was "still on the cards", but so too was "allowing the deficit to grow a bit".

Will he resist pressure from SAA, Eskom, SABC for more cash?

"Our decision will be informed by what government's strategic view is and the review on state-owned enterprises."

He suggested he would not give in to emotional bullying or blackmail from them, though. "We will not be emotionally pushed when they come before us for funding."

Nene agreed that one of his most important tasks would be to restore business confidence, which he would do by engaging with business "from day one".

He said that business had "pledged its support for the NDP", but "what is important is how concretely that is translated".

As for restoring investor confidence, that "will take a bit of time. But once they are convinced that the finances of the country are run properly and responsibly they will have no reason to doubt us".

To this end he would be engaging "a lot" with multinational institutions such as the IMF, he said.

What will his message to them be?

"That the cabinet that has been appointed by the president has been appointed in order to drive the NDP."

Who is Nhlanhla Nene?

South Africa's newly appointed finance minister, Nhlanhla Nene, is hitting the ground running with a new plan to avert a downgrading of the country's ratings.

Nene, a 55-year-old technocrat and former deputy to Pravin Gordhan, was sworn in this week amid news that the economy shrank 0.6% in the first quarter - the first time since the 2009 recession that GDP has fallen.

During an interview, Nene admitted it would be tough to avoid a ratings downgrade in the light of the five-month platinum-mining strike that had dragged GDP down.

"Look, we are in a difficult situation," he said.

"We just hope the ratings agencies are going to give us an opportunity to show what it is the new administration is coming in with."

Nene said the plan was firstly to show "there is stability, not only in the Treasury but in government as a whole".

"Second, to make sure we continue to display our resolve to implement the National Development Plan [NDP], not only paying lip service to it but putting in place clear machinery and mechanisms of implementation."

Nene, though well rated by the private sector, has little political capital, which some say may hamper his ability to implement the NDP in the face of opposition to it by the ANC's allies.

Surprisingly, he revealed he was only told of his elevation less than 24 hours before the president announced it. This apparently last-minute decision is likely to fuel speculation that Gordhan's move to head the cooperative governance ministry was far from well thought out.