Tito seeks endorsement of targeted State sell-offs

CAPE TOWN — Finance Minister Tito Mboweni continues to rile the labour unions and render invested (and corrupt) politicians speechless with rage with his no-nonsense, pragmatic approach to righting the economy. He’s questioning practices that have long since lost any valence, a more esoteric but potent example being the Road Accident Fund (RAF) which he says can be replaced with a consumer-oriented personal-accountability model. Why not introduce a law saying you can’t buy a car without showing you have sufficient insurance to cover accidents? Why must the State be financially burdened with consumer carelessness, even recklessness? Without being too explicit, he’s taking a crack at a nanny state creating and controlling huge communal pots of money which we’ve seen gratuitously looted (think PIC, RAF and all SOEs). At SAA, for example, he proposes merging all State-owned airlines, eliminating costly dual boards and executives, while selling off the explosive’s unit of Denel to the similar AECI Ltd. He describes what happened at SARS as ‘treasonous,’ with the all-too-familiar government love affair with the Soviet Union way past its sell- by-date. He reckons he has the answers to deploying SA’s scarce resources, but wants to first persuade stakeholders to come along for the ride. – Chris Bateman

S. Africa’s Mboweni questions need to hold onto State Assets

By Antony Sguazzin and Paul Vecchiatto

(Bloomberg) – South African Finance Minister Tito Mboweni said a discussion must begin on whether the government needs to retain control of all the assets it owns given the poor state of the national finances.

Mboweni has asked Minister of Public Enterprises Pravin Gordhan for a list of non-core state assets and has been provided with an “extensive list,” he said while being interviewed and answering questions from callers on Power FM radio.

“One should be careful not to elevate state ownership to a religion,” he said.

Mboweni, a former central bank governor who took office in October, has repeatedly questioned the logic of holding onto loss-making state companies, raising the ire of the labor union allies of the ruling African National Congress that oppose privatisation. Plans to restructure state power company Eskom Holdings SOC Ltd. are already being opposed by unions.

Mboweni said that the country should look toward merging its state-owned airlines to remove the need for duplicate boards and chief executives officers and could sell the explosives unit of state arms company Denel SOC Ltd. to AECI Ltd., a privately owned explosives company.

The finance minister also said that a new commissioner of the South African Revenue Service will be appointed next week and a new board for the Public Investment Corp., which manages the pensions of South African state workers, will be constituted within two weeks. Both institutions have been embroiled in scandals.

Once the current set of challenges facing the National Treasury have been resolved, Mboweni said he would like to return to the private sector. Mboweni has served as chairman of AngloGold Ashanti Ltd. and as an adviser to Goldman Sachs Group Inc.

“I am on public record saying it is time for old people to retire and it is time for young people to run the country,” said Mboweni, who is 60 years old.

Mboweni also called for stronger action against those who committed corrupt acts during the tenure of former president Jacob Zuma, saying that what happened at the national revenue service was “treasonous.”