South African Government
IT befalls Pravin Gordhan to demonstrate that South Africa remains committed to a prudent macro-economic policy following a madcap four days in December in which the finance minister was changed twice. This was the imbroglio in which President Jacob Zuma played chess with the most important portfolio in his cabinet, a turn of events that saw the rand drop nearly 10% in a week. No pressure then as the eyes of the nation turn to Gordhan’s first budget speech in February. China’s secular slow-down, electricity interruptions, labour unrest, and drought are some of the other factors Gordhan will have to bring into his reckoning as he plots a way forward for South Africa. Its almost certain at least one credit agency will downgrade the country to sub-investment grade, a development that would hinder the capital expansion plans of Transnet and Eskom, the health of which is critical to the mining sector. More specifically, the mining industry will be hoping that Gordhan takes a lenient approach to the controversial carbon tax having already postponed its application in 2014. Ditto, in respect of the Davis Tax Committee which Gordhan commissioned in 2013. Mining firms fear abandoning a 100% capital investment deduction would stop the construction of new mines.
LIFE OF PRAVIN
A qualified pharmacist, Gordhan was an ANC and SACP operative during the Eighties receiving banning orders after a period in detention. He was part of CODESA in 1991 but became prominent in South Africa affairs in 1999 as commissioner of the SA Revenue Service. His first stint as finance minister was between 2009 and 2014.
- Web Address: www.treasury.gov.za