Floyd Shivambu has the tools to lead Treasury

EFF leader Julius Malema said that he wanted Floyd Shivambu to be Minister of Finance if the ANC wants to be in a coalition with the EFF after the elections. Picture: Phando Jikelo/Independent Newspapers

EFF leader Julius Malema said that he wanted Floyd Shivambu to be Minister of Finance if the ANC wants to be in a coalition with the EFF after the elections. Picture: Phando Jikelo/Independent Newspapers

Published Apr 29, 2024


Dr Gumani Tshimomola

During a simulcasted radio interview with JJ Tabane, the Economic Freedom Fighters’ (EFF) Commander in Chief and President Julius Malema logically stated that the EFF would agree to a working relationship with the soon to be electorally defeated African National Congress (ANC) if the EFF Deputy President Floyd Shivambu is appointed as Minister of Finance and head of the National Treasury.

In response, reactionary and opposition political leaders, opinion makers and opportunists objected on ideological grounds and lack of comprehension of the role of the National Treasury, with some wrongfully suggesting that he does not have the capacity to lead the National Treasury.

Here we will illustrate beyond any sensible doubt that at this juncture, the EFF Deputy President is the most suitable and relevant candidate to lead National Treasury for both subjective and objective reasons.

This should be understood from the basis that he will be guided by the collective leadership, in line with the principles of the EFF, because no one becomes an executive authority alone and for their own sake.

As the longest-serving member of the Standing Committee on Finance over the past 10 years, spanning two full terms of Parliament, he has been instrumental in overseeing significant financial sector reforms and budget restructuring.

Throughout this period, he has consistently led meticulous oversight on strategic matters, contributing to substantial legislative submissions.

These include and are not limited to;

– a) Substantive policy submissions on illicit financial flows, which have led to both the acknowledgement of the scourge of illicit financial flows and the establishment of the Inter-Agency Working Group on Illicit Financial Flows. This group includes the South African Police Services, the Hawks, the South African Revenue Services, the Financial Sector Conduct Authority, the South African Reserve Bank, and the Special Investigating Unit, originally proposed as the Cross-Agency Task Team by the EFF.

– b) Influence on the Banks Act of 1990, which paved the way for the Financial Matters Amendment Bill. This bill amended the Banks Act to allow state-owned companies to apply for a commercial banking license, reflecting the EFF’s forward-thinking approach to building state capacity and mechanisms to ensure the transfer of economic ownership to the majority of our people.

– c) Advocacy for the Sarb amendment to nationalise the Central Bank, a move that, despite being a resolution of the ruling party, was retreated from due to cowardice.

– d) Legislation on anti-tax avoidance, aimed at combating illicit financial flows, base erosion, and profit shifting. Through these efforts, the EFF has shown a deep understanding of the complexities of international finance and its implications for national economic security.

– e) During the State of the Nation Address (Sona) debates and engagements, he made numerous inputs, including sound proposals for the establishment of a sovereign wealth fund, solutions to the electricity crisis, and the prescription of pension funds to prioritise the building of new industries and address the de-industrialisation of South Africa. These proposals highlight his comprehensive grasp of South Africa’s economic challenges and his innovative approaches to addressing them.

– f) Made substantial policy inputs on the transformation of the financial services sector and to be more inclusive and reflective of South African society.

– g) Actively partook in and gave sound guidance on various legislations including the Financial Services Amendment Act, the Insurance Bill, the Public Investments Corporation Bill and many other legislations that came to Parliament for deliberations.

All these and various other sound interventions he made on behalf of the EFF are evidence enough that he will be a square peg in a square hole. It is only narrow and selfish ideological prejudices that can object to these verifiable and objective facts.

Additional to Parliamentary responsibilities, the EFF deputy president is Head of the Governance Task Unit (GTU) in the EFF, which provides intimate oversight to more than 1,200 EFF public representatives in provincial legislatures and municipal councils across the country, including those deployed as members of mayoral committees and chairs of oversight committees.

This gives him intimate exposure to and knowledge of the functioning of government at provincial and municipal levels. This role completes his understanding of the overall functioning of government, enriching his perspective on national issues.

If academic credentials are anything to go by, the following constitute some of the post-graduate qualifications which are relevant for the role he is proposed to play:

– a) Honours degree from the University of the Witwatersrand and a dissertation which surveyed the differences between Growth, Employment and Redistribution (Gear) and Accelerated and Shared Growth Initiative for South Africa (AsgiSA).

– b) Master of Arts in Development Studies and a thesis which examined the extent to which fractions of capital influenced South Africa’s transition from apartheid to democracy.

– c) Master of Science in Development Studies from the School of Oriental and African Studies (SOAS) department at the University of London, which is ranked the 3rd best Development Studies in the world according to QS World University Ranking. The dissertation focused on China and Africa’s economic relations.

Whilst the individual attributes are beyond question and solid, what should convince all the people of South Africa, including doomsayers, are the key policy proposals on fiscal and monetary framework proposed by the EFF.

These include and are not limited to: aggressively combating tax avoidance, curbing illicit financial flows, expanding the tax base, and implementing a wealth tax.

Further measures aim at enhancing the nation’s infrastructure and fiscal health by adopting a build, operate, and transfer model for infrastructure development and delivery, focusing on maintenance, and improving municipal revenue collection.

The EFF will place a strong emphasis on job creation targets within our fiscal policy.

Additionally, we will work towards establishing a sovereign wealth fund and pledge to transparently disclose the terms and conditions of all government loans.

These interventions will substantially contribute to economic stability and growth because, despite the many claims and undue praises, the National Treasury has dismally failed to spur economic growth through fiscal policy. The numbers speak for themselves:

– a) The average annual real GDP growth between 2009 and 2023 was 1.17%. The recently appointed Director General of the National Treasury bemoans the reality that in the past 12 years, “economic growth since 2012 has averaged 0.8% and this is far below the levels needed to address high levels of unemployment and poverty”.

The DG further illustrates “over the same period, government borrowing has ballooned to support the rapidly rising expenditure. As a result, the debt service costs are choking the economy and public finances”.

– b) South Africa has the highest income inequality in the world, with a Gini coefficient of around 0.67 according to the World Bank report.

– c) In 2022, more than 18 million people lived in extreme poverty, and 51.6% of households identified as poor based on minimum income questions.

– d) The South African Social Security Agency (Sassa) pays more than 26 million grants every month, a testament to the widespread reliance on government support in the absence of meaningful participation in the economy and economic stability.

– e) South Africa spends more than R382 billion on servicing debt, more than what we spend on basic education, health, or economic development, due to a debt of over R6.2 trillion without anything to show for it.

– f) More than 11 million people are jobless. This is despite the fact that South Africa has one of the most expansive fiscal and monetary space to lead, harness, enable, enhance, and spur labour absorptive economic growth.

In essence, the EFF is uniquely positioned to bring about change in this regard. It would be unusual to appoint a qualified, experienced, and forward-thinking individual under the guidance of progressive leadership to lead the National Treasury.

The doomsayers and reactionaries will obviously not appreciate this inevitable reality due to their subjective private interests of keeping the stagnant economy, inequality, and poverty status quo intact.

* Dr. Gumani Tshimomola is an EFF senior researcher in the parliamentary caucus. His PhD thesis focused on the Treasury’s role in South Africa’s political economy.

** The views expressed do not necessarily reflect the views of Independent Media or IOL