The Africa Report - - CONTENTS -

Pres­i­dent Ramaphosa has called on a fi­nan­cial fire­fighter and po­lit­i­cal ally to steady the econ­omy and re­turn it to solid growth ahead of a cru­cial elec­toral test next year

SER­VICEDE­LIV­ERY PROTESTS and high-stakes elec­tions are pil­ing the eco­nomic pres­sure on Pres­i­dent Cyril Ramaphosa’s gov­ern­ment, and there is a new man in charge of South Africa’s eco­nomic tra­jec­tory: fi­nance min­is­ter Tito Mboweni. Mboweni has a rep­u­ta­tion as a hawk from his decade of run­ning the Re­serve Bank, hav­ing hiked in­ter­est rates to tame in­fla­tion – so the mar­kets re­acted pos­i­tively to his ap­point­ment. But Mboweni is now lean­ing more lib­er­ally, tweet­ing in April: ‘The state must own 40% of min­ing com­pa­nies […] and create a sovereign wealth fund.’ The op­po­si­tion Demo­cratic Al­liance’s David Maynier told lo­cal me­dia: “Mboweni was in po­lit­i­cal ex­ile for nearly a decade and his views on the econ­omy may not be as mar­ket-friendly as was first as­sumed. He is un­likely to rock the boat as the ANC is head­ing to an elec­tion in 2019.” Since he re­tired from the Re­serve Bank in 2009, Mboweni served on sev­eral cor­po­rate boards, in­clud­ing Dis­cov­ery Health and An­gl­o­gold Ashanti. The Lim­popo-born Mboweni was a vo­cal critic of for­mer pres­i­dent Ja­cob Zuma and emerged as a key ally to Ramaphosa. Aside from pol­i­tics, both share a love of fly fish­ing. Mboweni is seen by many as a safe pair of hands, but there is crit­i­cism

that Ramaphosa is re­cy­cling the same peo­ple in­stead of giv­ing a new, younger gen­er­a­tion a chance to per­form. Mboweni is the coun­try’s third min­is­ter in less than a year, and Ramaphosa had not been plan­ning on mak­ing any ma­jor new ap­point­ments be­fore the 2019 na­tional elec­tions. Mboweni has been part of the Ramaphosa in­ner cir­cle as a mem­ber of the gov­ern­ing African Na­tional Congress (ANC)’S Na­tional Ex­ec­u­tive Com­mit­tee. He is part of the eco­nomic trans­for­ma­tion com­mit­tee that in­cludes se­nior cab­i­net min­is­ters like Pravin Gord­han and other se­nior ANC mem­bers like Enoch Godong­wana. Mboweni has his pulse on gov­er­nance is­sues, hav­ing served as a cab­i­net min­is­ter in Nel­son Man­dela’s gov­ern­ment. He was the first black labour min­is­ter and over­saw the

in­tro­duc­tion of the Labour Re­la­tions Act, which al­lows for col­lec­tive bar­gain­ing and labour courts. Mboweni and his team face a daunt­ing ar­ray of prob­lems in the South African econ­omy. It is set to record only mea­gre growth this year and next, as the coun­try en­tered a re­ces­sion in Septem­ber 2018. State-owned en­ter­prises like South African Air­ways are los­ing large sums, and there are reg­u­lar protests about the poor state of pub­lic ser­vices. Un­der Zuma, most rat­ings agen­cies down­graded South Africa’s debt to be­low in­vest­ment grade. Mboweni wants to im­prove the rat­ing, but po­lit­i­cal forces on the left are mo­bil­is­ing over the need to pri­ori­tise the poor. An­drew Chirwa, chair­man of the Na­tional Union of Me­tal­work­ers of South Africa told re­porters: “Mboweni is hos­tile to the work­ing­class ma­jor­ity. Dur­ing his ten­ure as gov­er­nor of the Re­serve Bank, he bent over back­wards to cham­pion ne­olib­eral macroe­co­nomic poli­cies.” Mboweni will re­veal the first out­lines of his strat­egy to shake the econ­omy out of its dol­drums and ad­dress long­stand­ing prob­lems like un­em­ploy­ment when de­liv­er­ing his medium-term bud­get on 24 Oc­to­ber. Mboweni owes his new job to the on­go­ing fall­out of the gov­ern­ment’s ‘state cap­ture’ in­quiry into for­mer pres­i­dent Zuma and his ties to the Gupta fam­ily of busi­ness­men. His pre­cedessor, Nh­lanhla Nene, re­signed from the post in early Oc­to­ber when it was re­vealed that he met sev­eral times with the Gupta broth­ers. As The Africa Re­port went to press, Nene had not been ac­cused of any wrong­do­ing, but the South African po­lit­i­cal class is pre­par­ing it­self for more bomb­shell news from the in­ves­ti­ga­tion into gov­er­nance un­der Zuma. Crys­tal Order­son in Cape Town

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