Padayachy: African Finance Minister of the year !

Padayachy: African Finance Minister of the year ! 

Renganaden Padayachy was named African Finance Minister of the Year. The runner up was his Zimbabwean counterpart, Mthuli Ncube.

This award to our Pada and to Mthuli Ncube by the African Leadership Magazine , as highlighted by its editorial board, is more for “ promoting Afro-positive content and bringing the best of Africa to global audiences and platforms “ .

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It could not not have been for the proper management of their economies.

As for our Pada, recent international reports (IMF,WB,ADB…)show a total dismal picture of our economy under his stewardship, flagging the following:

-his failure to maintain Mauritius in the the high-income country status category

- his failure to avert the grey-listing and black-listing of our financial sector by FATF and EU respectively and a second downgrading by Moody’s to near-junk status in July 2022.. 

-stagnating investment.

-Loss of export competitivesness.

-skills shortages coexisting with high structural unemployment

-over 50,000 young people aged 16 to 24 are neither working nor studying. 

-only 43 percent of women actively participate in the labor force, whereas the average for men is 68 percent. 

-irresponsible populist measures that have resulted in elevated levels of budget deficits and public debt

-BOM's involvement in fiscal policy, both directly and through the Mauritius Investment Corporation which has weakened the separation of institutional mandates while increasing contingent liabilities

-Current Account deficit reaching a high of 13.2 percent in 2021 to 14.2 percent in 2022.

-his failure to control double-digit inflation-the highest in over a decade- due to the ineffective implementation of sound monetary policy 

-his abject failure to strengthen the macro-fiscal institutions and support fiscal discipline, including implementation of meaningful reforms to maintain debt sustainability and control contingent liabilities that would have provided the foundation to re-gain and sustain high-income status. 

-rising inequality, and acute cost of living crisis such that the common man /social workers/ committed politicians have to take to the streets and embark on hunger strikes to put pressure on the Minister of Finance to listen to the voices of the poorest . 

While the winners and runners-up for the African Business Leadership Awards (ABLA) 2023 shall be presented with these bogus trophies at the House of Lords of the United Kingdom and The Dorchester Hotel London United Kingdom, here some 30% to 40% of Mauritians earning between Rs 15,000 and Rs 18,000 per month will be struggling to make ends meet. 

A cost of liv­ing crisis that is inflicting max­imum dam­age on those least able to bear it. Many families are being forced to make sacrifices at the expense of innocent children going hungry. Govt is not responding promptly to the present distress faced by vulnerable households . 

“It is a daily fight against the high cost of living that we are undergoing and this is the worst finance Minister we ever had.” hollered an angry and hungry householder.

As for Pada’s comrade in arms and runner-up for the bogus award, the latest EIU report points out that his ZANU-PF govt is expected to retain power in the general election in July 2023 by using state resources to buy public support.

“Macroeconomic uncertainty arising from erratic policymaking, runaway inflation, a weakening currency, rising borrowing costs and worsening electricity shortages will dampen growth in the short term. In the absence of structural reforms to improve the business environment, combined with soaring inflation and shortages of foreign exchange, real GDP will grow only modestly in 2023-27.” La situation empire au Zimbabwe…. Un dollar américain valait 1.000 dollars zimbabwéens sur le marché noir il y a encore une semaine. Il s’échange désormais contre 4.000 dollars zimbabwéens (contre un taux officiel à 1.888).

Our Pada is in good company with such an award -ABL awards are bogus, mere publicity stunts without real substance-and this shows that this mystifying award therefore rests on other explanations than the responsible and commendable management of the economy !

 

Most relevant



• Yogeelen Samee

  En tres bonne compagnie ..Mauritius and Zimbabwe

  

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• Raj Ramlugun

  Thanks for bringing to light the status of our economy and its impact on the most vulnerable. Big issue for the common people is what is the better alternative…. and how do we finance/ make it affordable to the nation in the present context or the long run? Without getting sucked further in the debt or inflation trap! I rarely see the Opposition parties clearly articulating their alternative socioeconomic plans for the average , let alone common

  people, to grasp. As for awards coming from abroad, I do not rely on them since long. It’s all like a fraternity or private clubs where they keep rewarding and congratulating each other. Fair enough, it can serve to boost the ego or provide a sense of comfort/pride momentarily. But the real proof of the pudding is in the eating. How here, the majority of the people are feeling/ reaping the benefits of such awards in their daily living standard? If it is tricking down and fostering greater feel good factor to those at the lowest rung of the ladder, enhancing overall trust …then fine, let’s celebrate. But is it ? 

  

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    Rattan Chand

    Raj Ramlugun Many measures have been proposed for the short term namely an upward revision of the minimum wage or the introduction of a “ration card” for those truly in need, downward revision of fuel prices and basic commodities prices, extension of the CSG allocation, maintaining the subsidies on basic foodstuffs including specific measures targeting the needy and administered prices for some basic commodities……and such long term measures as land reform, the increase in local production of agricultural products, (Producing locally remains a slogan ), stabilisation of the rupee, efficiency in our port sector, greater participation of women , diversification of our exports and greater import substitution, a more effective Competition Commission to promote greater competition in our domestic markets , a more progressive tax system and the introduction of a Wealth tax ; the development of this additional pillar of growth , the Ocean Economy, including modernisation of our fishing industry...and a whole set of other meaningful measures in the Vision 2030 document...but these measures are not vote-catching, they can wait...the priority is for the quick wins -pension and other populist giveaways and freebies like the exemption from Municipal taxes which puts at risk the whole vision of urban planning and the quality of municipal services...

    

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  • Raj Ramlugun

    Rattan Chand thanks .I reckon you keep proposing sustainable alternatives … in a holistic manner. Unfortunately, not many who are vying to be in power are articulate enough in their proposals. Particularly how to bring a more inclusive model of growth, maintain/expand our social security/welfare state, meet environmental/energy challenges, ensure greater food security/autonomy etc. How clearly revenue will be increased to finance a higher/decent standard of living, ensure sustainable growth.? Most common people do not understand how national economy works and need to be balanced. What matters for them is how do we get more … at lesser cost or free? That’s how politicians in power have made us think and measure progress. Gagn plis gratis .. without ever bothering to ask where the money comes from. More so, when our elected representatives and leadership class rarely walking the talk in terms of exemplarity. I may be wrong, but that’s how I see things from the ground. 

    

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• Nalini Burn

  How can one just imagine a budget, composed of measures, without an explicit policy and strategic framework for it? And democratically developed and endorsed? 

  How to choose among the different proposals, menu of options(?) you mention Rattan? If there has not been an evaluation of policies- implicit or explicit- and budgets, not just a financial audit? Not just technical, but institutional capacity?

  I remember, while a consultant on gender equality financing and budgeting over the years, how the routine cry of ministries was how such proposals to build capacity were turned down. Only to note how much this failure of sectoral capacity,of project elaboration and management is also now lamented....

  There is so much that needs overhauling. That is a structural dimension in public finance reform, with less pain for those in lower income strata. 

  It seems to me that actual decisions are taken by a quasi-presidential super ministry, the PMO, with its EDB acting as its strategic , planning and operational arm. All appointed by the PM. Many from private sector, close to the regime.

  With much of public expenditure off-budget...

  Decades of buying into the high income high debt, high consumption model, both at national and individual level have shaped our attitudes, and mindset, trickling down very effectively to lower income groups, 

  Which is why the 2014 election heist of the remake of the economic miracle succeeded in tapping into this vein.

  As for 2019, much of the vote bank actively courted with min. wage and negative income tax. Incumbent govt. promises, on which the Privy Council will sooner or later decide, on whether it constitutes electoral bribery or just a party agenda put forward.

  Popular demystification of this model, popular economics education should really have been and continue to be the agenda.

  Apart from very small parties that will fail to get traction in time, who is even envisioning this? A few scattered clusters, individuals even in civil society. 

  And sadly a few will denigrate and undermine the latter's credibility, and offering nothing substantive and constructive themselves. 

  As for MOFED, do they have the technicians to even crunch numbers left?

  Even as far back as 2013, the WB decided that the dissolution of the Min. of Planning led to erosion of strategic capacity. But it does not mention that it had itself advocated its dissolution- supposed merger- to give pre-eminence to Min Of Finance.. This institutional withering, a standard IFI prescription in so many countries... With devastating results.

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• Sameer Sharma

  Let's do some basic math about how much the pada has drugged and doped the economy with steroids but yet real growth has not been spectacular 

  2019 18bn from bom money printing 

  2020 60bn from bom money printing 

  CSG which is used for everything under the sun 

  12bn per year 

  Debt 140bn increase since 2019 excluding some off balance sheet items 

  Mic 

  58bn spent with 32.5bn to go 

  Money printing, inflation and public debt have been the key steroids. This is not sustainable but worse, the long term potential growth of the economy has not really improved. It has in fact 

  declined moderately to 3 to 3.2 px potential growth 

  We have also created massive distortions with zombie companies 

  This is the finance minister of the year of Africa!