October 9, 2018: New Finance Minister in South Africa

Tito Mboweni has returned to the political and fiscal fold in South Africa as finance minister in a move that was welcomed by business organisations and labour — and saw the rand steady after a volatile day.

Following the resignation of Nhlanhla Nene on Tuesday, President Cyril Ramaphosa announced that Mboweni — a former reserve bank governor and labour minister — would take up the mantle.

The currency — which had skated over the R15 to the dollar mark during the course of the day on speculation about Nene’s future — recovered to around R14.70 following Ramaphosa’s announcement. The yield on the benchmark ten year bond also steadied somewhat, reaching around 9.2%.

Nene resigned in the wake of his testimony to the Zondo commission of inquiry into state capture last week. He revealed that, counter to previous public assertions, he had met with the controversial Gupta family on several occasions during his previous terms as both deputy finance minister and finance minister.

Mboweni’s appointment comes just two weeks ahead of the medium term budget policy statement (MTBPS). This year’s MTBPS has been seen as particularly pivotal as it is expected to flesh out Ramaphosa’s recently announced economic stimulus package.
Mboweni also steps up to the plate as the country is caught in the grip of a technical recession and government finances are severely constrained.

Nevertheless, business organisations and economists alike have welcomed Mboweni’s appointment. Mboweni also received a cautionary nod from trade union federation Cosatu.

While the oppositionel Democratic Alliance welcomed Mboweni’s appointment, both the DA and the Economic Fredom Fighters both call for the dismissal of two other ministers from cabinet – Bathabile Dlamini and Malusi Gigaba – who have both lied under oath when investigated. “Their continued stay in cabinet sends a message that Ramaphosa is inconsistent and fails go put the interests of South Africans above those of the ANC’s big shots”, the EEF said in a statement. (Mail & Guardian, SADOCC)