Montalto: Gordhan’s right message by boycotting Guptas, attacking cronies

By Matthew le Cordeur

Cape Town – Treasury’s snubbing of the post-budget breakfast sponsored by a Gupta-owned newspaper is boosting local sentiment ahead of Finance Minister Pravin Gordhan’s budget address on Wednesday, an economist said.

peter attartd montalto
Peter Attard Montalto, Nomura emerging markets economist

“Pravin Gordhan is proving adept at grasping the live wire that is ‘state-capture’ by the so called tenderpreneurs – something that of course got his predecessor but one fired,” according to Nomura emerging markets economist Peter Attard Montalto on Monday.

The Gupta family is coming under increasing pressure due to its close affiliation to President Jacob Zuma and his son Duduzane, who is a business partner of the Guptas.

The New Age Breakfast on SABC is a popular platform for ruling party ANC politicians to share their views.

The decision to pull out of this breakfast is “undoubtedly rallying sentiment locally, showing his (Gordhan’s) ‘power’ vs the president in being unfireable in the short term at least,” he said.

“The real question is if such moves and the resulting higher sentiment can boost growth enough to avoid sub-investment grade if there are no real accompanying micro-economic structural reforms,” he said.

“We still think it’s very important to consider what political space National Treasury has to operate in and don’t believe that extends to wider micro-economic policy reform.

“What it does include is some control over government narrative, public relations and spin, which is boosting local sentiment.”

Nomura expects a highly conservative fiscal stance, but with little wider reform.

BizNews publisher Alec Hogg said pulling out of the breakfast “is precisely the kind of bold action required to arrest the cancer of crony capitalism eating at the fabric of this economy”.

He said this was a good start to the “excising of a malignant tumour where a favoured few reap obscene rewards through Presidential patronage”. – Fin24