Cabinet reshuffle undermines growth prospects: Busa

WEB_PHOTO_ZUMALOSE_08082017

President Jacob Zuma has lost in the vote of no confidence

President Jacob Zuma has lost in the vote of no confidence

WEB_PHOTO_ZUMALOSE_08082017

President Jacob Zuma has lost in the vote of no confidence

President Jacob Zuma has lost in the vote of no confidence

JOHANNESBURG – Business Unity South Africa (Busa) on Tuesday said President Jacob Zuma’s latest cabinet reshuffle further undermined the prospects for the country’s growth.

The president announced changes to the national executive this morning, which included the axing of Higher Education minister Blade Nzimande.

Busa expressed grave concern with the second reshuffle this year, which saw a change in ministers in key portfolios including energy, home affairs, telecommunication and higher education, all of which Busa said was relevant to the work that it had engaged in on behalf of business.

“Stability and certainty are a pre-requisite for business confidence, translating directly into the country’s economic growth potential,” Busa CEO Tanya Cohen said.

“Political and economic stability is required to ignite inclusive economic growth and generate much-needed employment and revenue to pursue our social goals. This latest reshuffle further undermines prospects for South Africa’s growth.”

READ: New cabinet ministers already mired in controversy

Busa said it was particularly concerned with the lack of stability in the energy sector, taking into account the lack of a permanent CEO and board chairperson at Eskom.

It also said issues around the central energy fund portfolio, including Petro SA and the Strategic Fuel Fund, was also concerning.

“Busa has consistently requested the Department of Energy and the Minister to ensure that the Integrated Energy Plan and Integrated Resource Plan take into full consideration business views that have been submitted,” Busa said.

“The change in Minister may well take the country back another step in this regard, thereby delaying the finalisation of a sustainable and affordable energy solution for the country.”

Chris Yelland, an energy sector analyst, says Zuma has a long history of appointing unsuitable candidates.

David Mahlobo has taken over the energy department and it is widely thought his appointment is aimed at speeding up a nuclear energy deal with Russia.

"His role in energy has been non-existent up to now he has no background in energy, so far as I can determine,” Yelland said.

“The president continues a tradition of appointing Ministers of Energy that have no knowledge or activity or background in energy and this goes back sometime, so we've had a quick succession of ministers. Minister Ben Martins, Tina Joemat-Pettersson, Mmamoloko Kubayi and now David Mahlobo.

“All come in and out in a very short space of time.

“There's no possibility of them really gaining much understanding of the energy sector in the short time that they're there and it's quite clear that they are put there for the wrong motives."

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With Finance Minister Malusi Gigaba set to deliver his inaugural Medium-Term Budget Policy Statement next Wednesday.

Economist Lumkile Mondi says Zuma's latest cabinet reshuffle will have severe consequences for the country's economy.