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As the two top operational managers at National Treasury follow their political leaders out the door, they’ve successfully managed to allay fears that total State Capture and a radical diversion from previous fiscal policy direction is inevitable. Both stalwarts, former Deputy Director General Andrew Donaldson and former Director General Lungisa Fuzile are fully transparent in explaining how the ship will continue to be steered and give insight into just how this will be done. Fuzile goes even further, saying steady and experienced hands remain and that they have ‘thick skins’, fully resilient to any nefarious attempts at shady direction. Perhaps the most reassuring news is that Donaldson, considered the engine room driving the most ambitious projects such as National Health Insurance (NHI), will be consulting back, quietly guiding and advising those he mentored along a steady and consistent path. This was confirmed by the new Finance Minister Malusi Gigaba to parliamentarians at a committee hearing this week. The story below gives insight into how much institutional memory Donaldson carries. One can take some comfort in the outgoing pair’s motivated reassurances below, in spite of the sea changes at the top. Time will tell. – Chris Bateman
By Matthew le Cordeur and Liesl Peyper
Cape Town – National Treasury deputy director general Andrew Donaldson has retired after 24 years of leadership at the crucial institution with other stalwarts, but he plans to keep working with the department, he explained in an interview with Fin24 on Tuesday.
News of Donaldson’s retirement this week sparked fears of an exodus of Treasury’s key leadership, following the recall of Pravin Gordhan (minister) and Mcebisi Jonas (deputy minister), followed by the resignation of Lungisa Fuzile (director general) in April.
However, Donaldson told Fin24 that a new era of young leaders have been groomed to take over key positions in the department and said he has been handing over various roles over the years.
“I don’t think there is big turnover at Treasury,” he said. “There is no big exodus. Treasury will remain a strong central institution in South Africa.”
“There has been a growth of the internship programme and Treasury continues to offer great opportunities to young economists,” he said. “Treasury is an exciting place to work and attracts people who might otherwise go to finance or the banking sector.”
“My former management responsibilities are now in capable younger hands.”
These include his roles as head of Public Finance (now headed up by Dondo Mogajane), head of the Budget Office (now headed up by Michael Sachs) and most recently acting head of the Government Technical Advisory Centre (now headed up by Shahid Khan in an acting capacity, another Treasury stalwart).
Donaldson likely to continue working with Treasury
Donaldson said he will continue to have some connection to Treasury and he hopes to continue working in public economics. “It depends on the new leadership,” he said. “I might be 59, but I hope there are a few more years of useful career. I am simply moving from formal management.”
Finance Minister Malusi Gigaba told Parliament on Tuesday that he is aware of Donaldson’s decision, but he will continue to make use of his expertise as he has a lot of experience, especially with the National Health Insurance (NHI).
The position will be advertised in due course, but Gigaba said his first priority now is to appoint a new director general (DG) in the place of Fuzile.
“I want the DG to also have a say in the appointment of a new (deputy director general) DDG (in the place of Donaldson).”
Gigaba said he hopes to at least have interviewed people for Fuzile’s position by the end of May.
Fuzile told guests at a UCT Graduate School of Business event on Tuesday evening that there are negotiations underway to ensure Donaldson can continue working on various projects at Treasury.
From university to Treasury
Before joining Treasury in 1993, Donaldson studied at the University of Stellenbosch, Unisa and Cambridge University; and taught economics at the former University of Transkei, Rhodes University and the University of the Witwatersrand.
According to an OECD resume of Donaldson, he oversaw Treasury’s work on spending policy, social development and public service delivery, and has played a leading role in the reform of the budget process and reshaping of budget documentation.
“He contributed to the work of the Katz Commission on tax policy, served on the Committee of Inquiry into a National Health Insurance System, was a member of the team that drafted the 1996 macroeconomic strategy and (was) involved in the Interdepartmental Task Team on Social Security and Retirement Reform.
“He (was) a former member of the Board of Directors of the South African National Roads Agency and the Board of Trustees of the Government Employees’ Pension Fund.”
Donaldson looks back at challenges and achievements
Looking back at his most rewarding and exciting time at Treasury, Donaldson recalls putting together the country’s first medium term budget policy statement in 1997, when National Treasury worked to create a more integrated planning system for government’s spending agenda.
“We built a budgetary system based on the Constitution – it was exciting time,” he said. “It has evolved and changed a lot since 20 years.”
His most challenging experiences were engaging with other governmental departments, a key role as head of public finance.
“In the last 20 years, Treasury has strengthened its capacity to engage with other departments and parastatals and development finance institutions,” he said.
However, he said it was challenging building these relationships, especially with regards to developing the country’s social security and national insurance policies.
“There is a lot more to do,” he said.
With regards to the National Health Insurance (NHI) plans, he said there is interesting piloting going on, but said these are “massive, long-term reforms – I hope to keep engaging with these. I hope to get more time to work on it.”
“I was also involved in establishing Treasury’s Jobs Fund, and other employment initiatives, which are our country’s biggest policy challenges. We have learnt very interesting things, especially with partnerships with the private sector.”
Treasury challenges are shifting
Donaldson believes Treasury’s challenges are shifting. “The co-ordination with other departments and municipalities, as well as of its own team is becoming more important.”
In addition, its ability to co-ordinate growth plans with business and labour is equally important.
“The initiative of Treasury working with the business sector and unions got under way 18 months ago,” he said.
“You can’t develop and grow the economy as the state alone. This needs in-depth cooperation with other stakeholders, including national, regional and local initiatives.”
Donaldson believes the engagements will get going again, following Business Leadership SA and the CEO Initiative’s reluctance to work with new Finance Minster Malusi Gigaba.
“There will be different forums and stakeholders working together,” he said. “There is no other way forward. Gigaba has said he will engage with business and labour leaders.”
“It’s ongoing work that goes beyond the World Economic Forum and other major meetings – it’s what happens in between them,” he said. “We need on-going formal institutional engagement with stakeholders.”
Treasury staff to stick it out – economist
Nomura economist Peter Montalto said on Tuesday that it seems National Treasury staff “are clear they will stick out the transition as long as they can”.
“A new Director-General from this month should help after the departure of Lungisa Fuzile. We now expect an internal candidate – the best possible one – to become the new director-general.
“We think there has likely been a realisation that appointing externally is too risky a move. Such an appointment would be seen as a positive by markets.” – Fin24
Fuzile believes Treasury can survive political meddling
By Matthew le Cordeur
Cape Town – Lungisa Fuzile, the outgoing director general of National Treasury, believes his staff will prevent any attempt by politicians to capture the institution for unconstitutional means.
Fuzile, who will say farewell to his team in Pretoria on Monday, told guests at a UCT Graduate School of Business event on Tuesday evening that he has no regrets leaving the department after almost two decades.
“I am ready to try something else with a clean conscience,” he said. “I don’t have regrets: after 19 years, I will be very happy to watch government from outside.”
Asked what his views on state capture were, he said it was a “deeply political” issue that he would rather avoid discussing while still in his current role.
However, Fuzile said he didn’t want to downplay the possibility that Treasury could be targeted for nefarious means.
“When you have an institution like Treasury, it’s very hard to come in and disrupt the culture to get an entire institution aligned to ill intentions,” he said.
‘My colleagues have thick skins’
“If an attempt was made, it would be disruptive, but anyone who wants to do that; I pray for their success. My colleagues have thick skins.”
Rating agencies Fitch and S&P downgraded aspects of South Africa’s credit rating to junk status following the recall by President Jacob Zuma of Pravin Gordhan and Mcebisi Jonas as minister and deputy minister of finance respectively.
Fuzile then announced his resignation in April, while another Treasury stalwart – Andrew Donaldson – retired at the end of April.
The exit of long-standing state officials and politicians gave rise to concerns of an exodus of staff from Treasury, a bulwark that protects the fiscus from corruption and uncontrolled government spending.
However, Fuzile believes the institution will continue to perform its role well. He said the youngest deputy director at Treasury had been in his role for eight years.
“To change such people or to make them think the Constitution or the PFMA (Public Finance Management Act) does not matter, to rewire them to think sound fiscal management belongs in the dustbin; it’s hard to imagine that happen.” – Fin24
— Matthew le Cordeur (@lecordeur) May 9, 2017
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