BANK­ING ON TITO MBOWENI

Hav­ing sound fi­nan­cial man­age­ment knowl­edge and a pos­i­tive in­ter­na­tional pro­file counted in his favour – Kotze

The Sunday Independent - - FRONT PAGE - SIYABONGA MKHWANAZI

NEW fi­nance chief in the coun­try Tito Mboweni has less than two weeks to pre­pare for his maiden Medium Term Bud­get Pol­icy State­ment (MTBPS), but econ­o­mists and an­a­lysts are al­ready giv­ing him the thumbs up.

Tak­ing on one of the tough­est jobs in the land, econ­o­mists be­lieve Mboweni is an old hand in the fi­nance fam­ily, and will not be lost in the sec­tor. The mar­kets are al­ready warm­ing to him. The rand steadied this week af­ter his ap­point­ment af­ter weeks of havoc.

Mboweni ad­mit­ted af­ter he was ap­pointed that the job be­gins in earnest and jok­ingly told the me­dia at Tuyn­huys at his swear­ing-in cer­e­mony, that aus­ter­ity mea­sures be­gin now.

The 59-year-old be­came one of the youngest gov­er­nors of the Re­serve Bank in 1998 when he was 40-years-old.

This was af­ter he had served as labour min­is­ter from 1994 where he in­tro­duced a num­ber of pol­icy re­forms in the labour en­vi­ron­ment.

Mboweni’s po­lit­i­cal ca­reer was crafted in ex­ile pol­i­tics of the ANC when he skipped the coun­try to join the party in Le­sotho in 1980. He stud­ied eco­nom­ics and was part of the ANC’s eco­nomic trans­for­ma­tion team.

In 1997, he be­came head of pol­icy de­vel­op­ment in the ANC to re­align the pol­icy mat­ters of the party.

Af­ter he for­mally joined the South African Re­serve Bank (Sarb) to suc­ceed Chris Stals in 1999 af­ter serv­ing as ad­viser for the year, he quit all his roles in the ANC.

Head of pol­i­tics at Unisa Pro­fes­sor Dirk Kotze said Mboweni has the depth needed for a fi­nance min­is­ter.

He has done it all and has a good in­ter­na­tional pro­file.

Kotze said it was not a dif­fi­cult task for Pres­i­dent Cyril Ramaphosa to pick Mboweni af­ter the de­par­ture of Nh­lanhla Nene.

Other than Min­is­ter of Pub­lic En­ter­prises Pravin Gord­han who could have gone back to the Na­tional Trea­sury, Ramaphosa had to set­tle for Mboweni be­cause of his track record.

“The other con­sid­er­a­tion was that you can­not have some­one with no fi­nan­cial man­age­ment. At the same time, you need some­one with a high in­ter­na­tional pro­file. The fact that Mboweni is the for­mer min­is­ter of labour and gov­er­nor of the Sarb counted in his favour,” said Kotze.

Par­ties have com­plained that there have been five fi­nance min­is­ters in three years. Trevor Manuel was the long­est serv­ing, with a 16-year ten­ure.

Peter At­tard Mon­talto of In­tel­lidex, a lead­ing South African fi­nan­cial ser­vices re­search house, said a strong fig­ure was needed to fix the Na­tional Trea­sury and drive the coun­try’s macro-eco­nomic pol­icy. Mboweni is also urged to look at the pub­lic purse as debt is rock­et­ing.

The na­tional debt is close to 60% to the coun­try’s gross do­mes­tic prod­uct and is the big­gest sin­gle ex­pen­di­ture item in the bud­get.

Mboweni’s big task is to man­age the fis­cus in a sus­tain­able way.

De­spite Mboweni hav­ing been out of pol­i­tics for­mally when he led the Sarb, he re­turned to the ANC when he was elected to the Na­tional Ex­ec­u­tive Com­mit­tee (NEC).

He has been serv­ing both in the NEC and Na­tional Work­ing Com­mit­tee over the past few years, and was in touch with pol­icy de­ci­sions of the ANC. How­ever, the task for Mboweni is to grow the econ­omy. The econ­omy has not grown above 5% in the last decade, and the In­ter­na­tional Mone­tary Fund (IMF) and World Bank have re­vised growth fore­casts down to 0.8% and 1% re­spec­tively.

The World Bank’s growth fore­cast was re­vised from 1.4% to 1%. The IMF’s re­vi­sion was down from 1.1% to 0.9%.

But Kotze said Mboweni would not have a prob­lem try­ing to fix the South African econ­omy. What is com­mend­able is that Ramaphosa is a hands-on pres­i­dent with the grasp of macro-eco­nom­ics and pol­icy and he will make a great team with Mboweni in stim­u­lat­ing the econ­omy.

The ANC has also backed the ap­point­ment of Mboweni, say­ing this was the right choice.

It said he will con­tinue with the pol­icy tra­jec­tory of the party and im­ple­ment­ing govern­ment pol­icy as di­rected by it.

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