Why Pravin Gordhan Won't Bail Out Mam'Batha

Thursday, 16 March, 2017 - 09:35

Public finances aren't run like a spaza shop's cash box. It's a little more complicated

Minister of Finance Pravin Gordhan runs a tight ship at National Treasury and there was simply no way he was going to be complicit to social development minister Bathabile Dlamini's mangling of the social grants issue.

That much was clear after the appearance of Gordhan and his whole team – including his deputy, director-general and chief procurement officer – in front of parliament's standing committee on public accounts on Tuesday to account for their role in the social grants fiasco.

Gordhan used the opportunity to explain to MP's, his political opponents and the public how things work in the real world and why a chummy deal between doting cabinet colleagues won't simply condone irregular and wasteful expenditure. Public finances, he explained, are managed according to legislation, strict regulations and protocol and the delegation and separation of authority.

"We can't simply say OK, Mam'Batha," he seemed to say. It's a little more complicated than that.

Government spends in the region of R1,5-trillion in procurement in every three-year cycle. That's a lot of taxpayers rands up for grabs in thousands of tenders every year, ranging from stationary to cloud storage space and fleet management.

The regulatory framework which governs procurement – like the provision of a social grant payments system – is rooted in the constitution and based on the Public Finance Management Act, aided by regulations and treasury circulars guiding policy.

This framework sets out the process, directed by a three-tier committee system which draws up tender specifications, evaluates bids and adjudicates the best options. Decisions are informed by departments' own strategic plans that they submit to treasury.

This strict framework was strengthened by the establishment of the office of the chief procurement officer, which evaluates all bids more than R500 000 at national level and R200 000 at municipal level.

Of course, government officials explain, there are instances where so-called deviations from accepted procurement practice and the guiding framework is allowed. In the event of a natural disaster, for example, it's not practical to get three quotes for blankets and to go through the whole process – in instances like that, treasury will condone the expenditure and it won't be deemed fruitless, wasteful or irregular.

A lack of planning, foresight or any other ulterior motives won't however cut mustard – and that's what Dlamini and her advisors refuse to understand or accept.

When told by MP's that treasury must use its teeth, Gordhan saw the gap to state the case for fiscal responsibility and good governance, under assault from populists and rentseekers.

"Let me be frank: unless we create the environment within which we do the job assigned to us by the constitution and the law and accept that we all have our respective roles . . . unless we do that we slip into sloganeering, and then those other objectives emerge, where we hear 'weaken National Treasury . . . take over National Treasury'. This isn't child's play," he warned.

"It takes a tremendous amount of courage on behalf of treasury staff to even show their teeth, let alone use it."

And he subtweeted Dlamini: "Follow the law, do what needs to be done and follow due process . . . without too much other obligations in terms of extracting money from the state for wrong purposes. To put it plainly, if you follow the law life would be much easier."

It's not a question of understanding the law, even if it constrains you, it's a question whether you are abiding by it, Gordhan explained.

"If you can't do so, be transparent about it, that's why we have deviations (from the standard procurement procedure, that Dlamini wants for the grants contract) . . . and do what's necessary to account."

Dlamini is on her own.

  • Pieter du Toit is the Deputy News Editor at HuffingtonPost South Africa. This article first appeared on Huffington Post SA

Photo courtesy: TimesLive

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