It seems the reams of data produced by Statistics SA, SA Reserve Bank’s impeccable economic research, and the inputs from the ministers of finance and public enterprises are not sufficiently clear about what is wrong in the economy and how to fix the problems.
The new Presidential Economic Advisory Council will, according to The Presidency, “ensure greater coherence and consistency in the implementation of economic policy and ensure that government and society, in general, are better equipped to respond to changing economic circumstances”.
The new economic advisory council is also intended to build a capable state.
According to the formal announcement, the council will be chaired by the president, will meet every quarter, and will receive support from National Treasury and existing economic research structures. The announcement states that the new council will engage with the existing National Economic Development and Labour Council (Nedlac).
As an aside, Nedlac was established as “the vehicle by which government, labour, business and community organisations seek to cooperate, through problem-solving and negotiation, on economic, labour and development issues and related challenges facing the country”.
President Cyril Ramaphosa has appointed 18 members to the council and will announce a 19th member later. Eleven of the members are academics, mostly from SA universities.
Moneyweb looked at the academics’ published research to get an idea of their approach to economic matters.
Here then, is some background on the council members (in the same order as in The Presidency’s announcement):
Prof Benno Ndulu
Former professor at the University of Dar es Salaam. and governor of the Bank of Tanzania from 2008 to 2018, Ndulu is credited with reviving Tanzania’s economy with reforms aimed at inclusive growth. According to a Reuters interview, he advocated lower current account deficits and fiscal and debt discipline. His reforms were to licence more commercial banks in Tanzania and allow mobile financial services and the establishment of credit bureaus.
Prof Mzukisi Qobo
A lecturer in international business at the University of the Witwatersrand, Qobo has published various papers on international business, as well as research on the mining and resources sectors.
Qobo’s inclusion will make for some interesting moments during meetings, given his role as co-author (with Prince Mashele) of ‘The Fall of the ANC: What Next?’
On the homepage of his own website is some ready advice for the president: “Government needs to keep the momentum by demonstrating more decisiveness in reforming the economy, in eliminating wastage in government, in cutting red tape and in rebuilding institutions that are damaged.”
Prof Dani Rodrik
Rodrik is professor of international political economy at Harvard University and has published several articles on international trade and industrial development. A lot of his papers deal with the effects of opening economies for global trade. One is titled ‘What constitutes good economic policy and why some governments are more successful than others’.
Prof Mariana Mazzucato
A professor at the University College London, Mazzucato has won several awards, including a prize for Advancing the Frontiers of Economic Thought. Much of her work is focused on new approaches to capitalism, apparently following her belief that capitalism is in crisis and does not work. One paper is titled ‘Rethinking capitalism: Economies and policy for sustainable and inclusive growth’.
One of only a few economists on the panel who hails from the business world, Matikinca-Ngwenya worked at the Bureau for Economic Research before joining Rand Merchant Bank. She was appointed chief economist at FNB at the age of 29. Her analysis of the 2019 budget speech concluded that “at some point the government is going to have to rein in the public wage bill and make these departments more productive”. Given her banking background, she is also outspoken on the need to build investor confidence in SA, saying that the biggest risk facing the country is the outflow of foreign investment.
Dr Renosi Mokate
Among her long list of qualifications and positions, Mokate’s service as former deputy governor of the Reserve Bank and consultant to the ministry of finance and to treasury is important as a member of the new council. She is also listed as chairperson of the board of trustees of the Government Employees Pension Fund (GEPF), shouldering the responsibility for ensuring that the Public Investment Corporation (PIC) invests members’ pensions effectively.
Dr Kenneth Creamer
Another noted academic (from the University of the Witwatersrand), Creamer has published a lot of papers on fiscal policy, monetary policy, macroeconomics, competition policy and labour market policy. He is also a director of Creamer Media, publisher of the respected Engineering News and Mining Weekly titles, which hopefully translates into an ability to translate academic knowledge into practical solutions.
Prof Alan Hirsch
Hirsch knows the way from his office at the University of Cape Town to the president’s office quite well, having served as member and chief economist of earlier advisory boards at the presidency from 2002 to 2012. Besides a long list of positions and academic publications, he is also a member of a not-for-profit economic research outfit based in Pretoria – Trade and Industrial Policy Strategies, which facilitates research, projects and seminars, and maintains a big economic database. Its research covers all economic sectors. Of importance here is that it has done a lot of research into the potential impact of government policies.
Prof Tania Ajam
The presidency describes Ajam as an expert on fiscal policy and public financial management, subjects she lectures on at the University of Stellenbosch. Her published research includes papers on how to get value for money from public spending and the workings of the Public Financial Management Act. Hopefully the decision makers will take her views – such as this one: “a highly politicised bureaucracy staffed by under-qualified, inexperienced, but politically connected incompetents also invariably compromises the state’s ability to deliver on its democratic mandate” – to heart.
Dr Grové Steyn
It’s not difficult to predict what Steyn will tell the president and his fellow council members. Simply, to fix Eskom. He is a member of private consultancy Meridian Economics, most of whose work has centred on Eskom, Nersa, power tariffs, electricity supply, Eskom’s financial health, and the effects of electricity supply on economic development, as well as the options for restructuring Eskom for sustainability.
Sihlobo will be the voice of the very important agricultural sector. The Presidency notes that he is head of Agribusiness Research at the Agricultural Business Chamber of SA, but neglects to mention his stint as economist at Grain SA or his website, Agricultural Economics Today. He has advised Ramaphosa before, as a member of the panel that looked into land reform. His work includes research into labour, productivity in the agricultural sector, land reform and international trade.
Dr Liberty Mncube
Mncube, former chief economist at the Competition Commission, is a lecturer in economics at the University of the Witwatersrand. He is also listed as managing director of FTI Consulting, an independent advisory and economic advisory firm. Its website creates the impression that it produces bespoke research reports for clients and uses the research to testify in court cases where some kind of economic opinion is needed.
Prof Fiona Tregenna
Tregenna’s academic qualifications are astounding, including post-graduate degrees from Cambridge and Massachusetts. She currently lectures on economics and econometrics at the University of Johannesburg. Her published papers makes for good reading, covering aspects of industrialisation and deindustrialisation in developing economies. One of her main points is that developing countries should not deindustrialise – move from a manufacturing economy to a service-orientated or information economy – too early. In short, industry creates wealth and jobs.
Prof Haroon Bhorat
Another academic, Bhorat, from the University of Cape Town, has built expertise in labour economics, researching the effect of a minimum wage, poverty, income equality and the distribution of wealth in SA. One of his interesting papers covers aspects of higher education, employment and economic growth.
The presidency introduced Cawe as a “development economist engaged as a public intellectual”. He served on the recent Nedlac and presidential advisory panel to set a national minimum wage. Cawe is also noted as an ambassador of non-profit Wellbeing Economy Alliance, which describes him as economist, columnist, radio presenter, photographer and activist.
Prof Vusi Gumede
In addition to his post as professor at the University of South Africa (Unisa), Gumede has authored several books, including Inclusive Development in Africa. He also started Gumede Academy & Research, described as an intellectual project and professional network. His research papers include Rethinking and Reclaiming Development in Africa, Revisiting Regional Integration in Africa, Towards Effective Development States in Southern Africa, and Illicit financial Flows in Southern Africa. He also contributed to the Nepad economic plan.
Dr Thabi Leoka
One of the few economists from the private sector, Leoka started her career at Investec Asset Management, working in SA and London. She recently served on the commission of inquiry into the shenanigans at the Public Investment Corporation as well as the finance minister’s panel that reviewed the value-added tax (Vat) status of basic products. She also chairs the economic committee at Stats SA and is listed as one of the eight board members of Corruption Watch.
Prof Imraan Valodia
Valodia is an economist and dean of the Faculty of Commerce, Law and Management at the University of the Witwatersrand. He is an expert in the informal economy, an important part of the SA economy. He has written papers on inequality, competition policy, industrial development, employment in developing countries and, above all, the informal sector, with research into the state of the informal economy and the collection of data about the informal economy.
Hopefully the new economic advisory council will be able to bring tangible change and push government to do the things we all know are necessary.
Sceptics might say it is merely another talkfest, the standard solution to any problem in SA. Whatever the problem, we hold a meeting, indaba, bosberaad, inquiry, commission of inquiry, lekgotla or appoint a council to talk until the specific problem is overtaken by a new, more urgent problem that requires a new meeting, indaba, enquiry et al.
Important to note is that the president stated that the members are serving voluntarily, without payment, except for a travel and food allowance.
Listen to PwC Africa economist Christie Viljoen’s interview on SAfm Market Update with Moneyweb:
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