Tito Mboweni’s appointment as the new finance minister leaves South Africa’s economy, for the time being at least, in safe hands.
Economists across the board agreed that the former Reserve Bank governor was highly accomplished and would be able to hit the ground running – a critical requirement for the country in the face of yet another looming downgrade.
“He has an impressive CV,” said Nedbank chief economist Dennis Dykes. “Mboweni is not only a senior member of the ANC national executive committee but he is also a previous minister of labour and served two terms as Reserve Bank governor.”
Mike Schussler, an economist at economist. co.za, said considering the circumstances it was the best possible decision President Cyril Ramaphosa could have made and exactly what South Africa needed for the next year or two. It was a sentiment shared by the markets. They reacted well to the announcement of his appointment after taking a plunge earlier in the week when then finance minister Nhlanhla Nene admitted during testimony before the state capture commission of inquiry that he had lied about meeting with the controversial Gupta family.
“Nene was a shock and the rand took it badly,” said Schussler. “With very little room to manoeuvre the president, I believe, has made the best possible move.” The only options other than Mboweni, said Schussler, were Trevor Manuel, Pravin Gordhan or Gill Marcus. Both Dykes and Schussler told FTW that several factors made Mboweni the best choice. This included his strong and forceful character as well as the fact that he was well known to the financial markets and had a strong financial background. Mboweni is all this and more.
“The position requires a senior person who will not be easily bullied by cabinet colleagues,” said Dykes. “I think for now it is the best decision for the country, but we will have to wait and see. Schussler agreed saying Mboweni’s forceful personality was just what was required for now, but not necessarily for the long term. “He will not sit back for the likes of Tom Moyane and others. He is a strong character,” he said. “In terms of immediate action there is not much that he can do as the medium-term budget policy statement is in three weeks’ time. In an important department such as finance, continuity is key and Mboweni understands that very well. We can possibly expect more from him in the next cycle,” said Schussler.
But, while political parties, analysts and economists praised Ramaphosa for his wise choice, unions were less enthusiastic. The National Union of Metalworkers of South Africa (Numsa) was not impressed saying Mboweni was “arrogant” and “hostile to the working class”.
The position requires a senior person who will not be easily bullied by cabinet colleagues. – Dennis Dykes
