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How accountants need to play a central role in Tito Mboweni’s growth plan

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SA Institute of Business Accountants (Saiba) comments on Tito Mboweni’s growth plan as follows:

Tito Mboweni’s growth plan for SA is a bold and ambitious plan, and needs to be adopted if we are to return to the 4-5% growth levels of a decade ago. This is what is needed to get the economy moving again.

Accountants have a vital role to play in rooting out the misspending and corruption. A sizeable portion of GDP was squandered due to misspending and corruption and it cannot be allowed to continue.

“It’s clear to everyone in SA that the country is facing unprecedented levels of corruption. We have had multiple growth plans in the past, starting with the Reconstruction and Development Plan, but these have all failed in achieving their targets. One of the key reasons for their failure was under-estimating leakage from corruption,” says Saiba CEO Nicolaas van Wyk.

Van Wyk proposes the mandatory appointment of external accountants to do performance audits on each project announced by government. Accountants must sign off before money is spent.

It is also vital that chartered accountants are not privileged in this process. All suitably qualified accountants must be allowed to perform this function. “We have thousands of qualified, mainly black, accountants who cannot find work. We need to get them to work and this is one way of doing it,” says van Wyk.

It is also crucial to remove the potential to influence accountants, in the same way that quantity surveyors can be influenced to sign off on work by project developers – who are the people paying their bills. “An independent payment channel needs to be set up to ensure absolute independence and transparency,” says van Wyk. “This should remove the potential corruption that can creep into a growth plan such as the one proposed by Tito Mboweni, and we believe accountants are vital to achieving that goal.”

What the country also needs is an Accountants Act, such as recommended by the World Bank in 2013. At present, the accounting sector is quasi-regulated, which creates jostling and tension between the different accounting professional bodies.

“There’s a lack of a national unified framework, which has the effect of forcing professional bodies to do lobbying. SA Institute of Chartered Accountants (SAICA), SA Institute of Professional Accountants (SAIPA) and the Association of Chartered Certified Accountants (ACCA) have been forced by the current regulatory structure into lobbying government on behalf of their members, and this leads to the risk of regulatory capture. This is not illegal, but it is undemocratic. The risk of not having a regulatory framework is that government is prone to regulatory capture, and as SAIBA we will fight this tooth and nail. SA’s sovereignty must not be subject to this kind of capture.”

Van Wyk says the proposed Accountants Act would set a unified qualifications framework for all accountants and set standards appropriate for SA. This has the added benefit of allowing government to talk with one entity rather than a dozen. For example, such a unified entity would decide how the financial statements of schools be presented and what information should it include. The same should go for NGOs and other bodies.

“At the moment it is barbaric, with each professional body trying to protect its turf. Practitioners are confused, so is government. We need an Accountants Act to sort this out,” says van Wyk.

From City Press: The ANC is treading carefully with regards to Finance Minister Tito Mboweni’s economic growth plan.

Although the party finally publicly backed parts of the plan, it also announced that there were certain aspects that required further consultation in particular with its alliance partners.

The pronouncement was made by ANC head of economic transformation Enoch Godongwana during a media briefing on Wednesday following a four day meeting held by the party’s highest decision making body, the National Executive Committee (NEC).

Godongwana said “the document [Mboweni’s economic growth plan] has not yet been accepted in its entirety. When we mentioned [during the media briefing] that the ANC considered and agreed on a range of economic policies this includes some of the micro-reforms contained in Mboweni’s economic growth plan.

“I must say that there are some elements in the plan that were not discussed because deliberation on those matters belongs elsewhere. You will see [in the document containing the resolutions of the NEC meeting] that we did not discuss or make reference to the legal market reforms or the labour market forms contained in Mboweni’s economic growth plan because we have agreed with unions and other stakeholders that these matters would be better dealt with at a different level.”

“Engagement on these matters would be better where the expertise to engage on these issues is available – for instance the labour market reforms were discussed in the jobs summit at which the ANC was not party to. It doesn’t mean they have been completely dropped,” said Godongwana.

ANC secretary-general Ace Magashule also reiterated that the ANC has agreed on a package of economic interventions to help grow the struggling economy and create jobs.

Adding that many of the suggested solutions were already contained in existing policies including the National Development Plan, the party said it would focus on the implementation thereof.

Maashule said chief among the resolutions reached by the ruling party was that it needed to start implementing promises made in its 2019 manifesto and its 54th elective conference.

“We had a really good four days where people were open and were very frank, engaging, it was wonderful. I think the media must capture that mood of positivity so that we make sure society in South Africa has the positive mood to rebuild,” Magashule said.

He went on to say that even though the ruling party had held positive discussions it was still incumbent upon the party to engage its alliance partners – in particular Cosatu and the SACP – who have openly rejected the economic growth plan.

“We said where there are still issues to be addressed and flagged we have actually made sure that we will come back and address those issues. The party will host a session with its alliance partners and iron out the remaining disagreements. Areas of disagreement are not much so I am sure we will see eye to eye soon,” said Magashule.

“The NEC confirmed that the overarching objective of economic policy remains to build an inclusive economy by stimulating investment, growth and job creation and thereby decisively tackling poverty and inequality, raising living standards and improving the well-being of all South Africans,” Magashule said.