Ramaphosa appointed Godongwana – chairman of the Development Bank of Southern Africa – on 5 August, after Tito Mboweni resigned.
“The business community knows him well. International investors are looking forward to working with him,” says Mesh Pillay, CEO of the YW Capital investment firm in Johannesburg. “He’s the right choice for the country. He ticks all the boxes.”
Godongwana is a “policymaker at heart” and his style is “softer and more understated” than that of Mboweni, Pillay says. The new minister is able to combine technical acumen and political skill, and will take a wide range of opinions into account as he formulates policy, he says.
- Pillay says Godongwana is taking the job because he wants to, rather than because he needs it.
- He has turned down previous opportunities to enter government and has waited for the right opportunity to “add value,” Pillay tells The Africa Report.
- Alec Abraham, senior equity analyst at Sasfin Wealth in Johannesburg, says Godongwana gets credit for preventing “potentially damaging policies” such as the nationalisation of the mining industry and the country’s reserve bank as head of the ANC’s Economic Transformation unit.
- “This probably explains the absence of an over-sized negative reaction on the rand since the announcement,” Abraham says.
Ramaphosa was “not spoilt for choice” in making the appointment, says Louw Nel, senior political analyst at NKC African Economics in Pearl. The appointment was one which would have caused “the least amount of jitters” in the markets, except perhaps for the reappointment of Pravin Gordhan, Nel says.
- Gordhan was finance minister from 2009 to 2014, and again from 2015 to 2017 before President Jacob Zuma sacked him. Turning back to Gordhan “would have come at a political cost,” Nel says.
- Nel argues that Godongwana has well-documented “statist impulses” demonstrated by his position papers as head of the African National Congress (ANC)’s economic transformation committee.
- In July 2020, Godongwana wrote that “the Covid-19 pandemic has … legitimised a greater and more active role of the state in guiding the economy.”
While Nel says that Godongwana’s familiarity with international investors will stand him in good stead, he questions whether the new minister will be strong enough to impose his own idea on the party. Both Gordhan and Mboweni were also seen as business friendly, but “neither of them had tremendous success in getting international players to look past South Africa’s many disadvantages as an investment destination.”
- Godongwana will have to do “a better job in managing the politics than his predecessor if he hopes to hang around long enough to put his stamp on government policy,” Nel says.
- Pillay at YW Capital argues that Godongwana has the skills to bring together forces within and outside the ANC.
- While Godongwana is “informed” by his background in trade unionism, he is not trapped in its concepts, Pillay says.
- He points to Godongwana’s opposition to pension fund savings being used to bail out state-owned enterprises.
- “He is not a talker, but a do-er. He is not concerned about being the most popular.”
Godongwana will need all his political acumen if he is to succeed where others have failed in making South Africa more attractive to investors.
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