Wednesday, January 19

The Treasury proclaims stability as key official outputs

South Africa’s National Treasury’s succession planning is sufficient to ensure that the departure of key personnel does not disrupt plans to return public finances to a sustainable path, its top official said.

Tshepiso Moahloli, head of asset and liability management and the highest-profile woman at the Treasury, became the last senior official to resign last week as new Finance Minister Enoch Godongwana prepares to deliver. the medium-term budget. His departure follows that of Roy Havemann, Catherine MacLeod, Ian Stuart and Khetha Dlamini, all senior Treasury officials who regularly interacted with investors.


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While investors have no doubts about the skills and qualifications of Treasury personnel, they are concerned that there are not enough experienced people to replace veterans like Stuart and fill other vacancies, said two economists who are closely monitoring personnel changes. They asked not to be identified due to the sensitivity of the issue.

“Markets shouldn’t be worried or very worried about people leaving,” CEO Dondo Mogajane said in an interview on Sept. 23. “Permanently, you can’t say that the Treasury’s capacity has diminished to the point where they have to be concerned.”

Mogajane said he recently signed 54 new posts at the Treasury, at various levels.

Investors will look to Godongwana on November 4 for clear strategies to reduce debt and reduce budget deficits. That’s after public finances rapidly deteriorated over the past decade, in part due to a series of bailouts for unprofitable state-owned companies, including Eskom and South African Airways.

Figuring out how to control those debt metrics was a key component of Moahloli’s work. She is being replaced by Duncan Pieterse, the current head of economic policy who has been at the Treasury since 2013.

In February, the Treasury projected debt to peak at 88.9% of gross domestic product in fiscal 2026 and aimed to achieve a primary budget surplus a year earlier. Deviations from the framework could put public finances on an explosive path, the International Monetary Fund warned in July.

Improving metrics

Godongwana’s medium-term budget is likely to show improvement in key metrics, after changes in the way gross domestic product is calculated increased the size of the economy. Tax revenues have also exceeded estimates due to a windfall in mining profits.

President Cyril Ramaphosa, who came to power in 2018, has vowed to avoid a debt crisis and push through the reforms needed to boost private investment and tackle record unemployment. Godongwana, a heavyweight in the ruling African National Congress, is a key ally of the president and has advocated for investor-friendly programs. He has ensured the market the continuity of policies since his appointment on August 5.

Among the key officials whose possible departure worries economists is Ismail Monomiat, the 64-year-old head of fiscal and financial policy. The unofficial retirement age in South Africa is 65.

The Treasury has a “strong” talent pool, with three-quarters of top managers under the age of 50 and more than half of all staff under the age of 40, Mojagane said.

The annual turnover rate for full-time Treasury staff as of Aug. 31 was 3.9%, compared with an average of 5.5% in all government departments, he said. Systems and processes that have been institutionalized, collective efforts to prepare key policies, including the medium-term budget and a strong portfolio of internal talent, mean that operations are not compromised by personnel changes, he said.

“Fortunately, the policy is such that they fully support us in this environment and we are not about to collapse,” Mogajane said.

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