South Africa | Spotlight: Tito Mboweni
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 working-class 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.
This article first appeared in our November 2018 print edition of The Africa Report magazine