Tito set to stay

Reserve Bank Governor Tito Mboweni will be asked to serve another term, a senior Luthuli House official has told the Mail & Guardian.

Observers point out that the fact that Mboweni’s five-year contract expires on August 8, just three weeks away, while no successor has been named, makes it a racing certainty that he will be retained in his current job.

Mboweni, who has said he is available to continue in the Reserve Bank post, fuelled speculation that his contract would be renewed when he concluded his June monetary policy briefing by telling reporters: “See you later.”

Reserve Bank governor for a decade, he was appointed to the position a year before he took over from predecessor Chris Stals.

Government officials have been reluctant to comment on the governor’s future, referring all inquiries to the presidency. Given the trade union movement’s historic hostility to his fiscal conservatism, it is something of a hot potato.

But a Luthuli House official close to President Jacob Zuma said on Thursday: “We don’t see any reason why we must change him.
He himself has indicated that he is available to serve another term.

“There are obviously also continuity reasons. But more importantly we believe that, notwithstanding policy issues raised by our alliance partners about inflation targeting and monetary policy, he has been very effective in this post.

“He has successfully dispelled all the doubts raised by people who questioned whether a black person could lead this bank,” the official said.

The silence on the appointment of a governor has been a point of concern for both the private sector and government.

A government official said it would have been important to deal with uncertainty by making a timeous announcement and “not waiting [until] the last minute”.

While the market has been wary of Mboweni’s hawkish stance on interest rates in the past, it has largely been supportive of his monetary policy and inflation targeting.

Mboweni’s toughest critics have chiefly come from the ANC’s leftist allies Cosatu and the SACP. Cosatu president S’Dumo Dlamini said in June that the organisation would not support another term for Mboweni and that “change was needed” at the Reserve Bank.

But what form that change will take is unclear. No obvious candidate has been singled out to succeed Mboweni.

Brait economist Colen Garrow told Reuters yesterday that if change were to come, then it would likely come from “within the central bank”.

Mboweni has three deputies under him: Xolile Guma, Renosi Mokate and Aaron Mminele. Of these, Guma has been loosely touted as a possible replacement.

Garrow said: “[An announcement] has been left so late to make a major change to the current structure. My feeling is that we are unlikely to have anyone but Mboweni as governor of the central bank.”

Rapule Tabane

Rapule Tabane

Rapule Tabane is the Mail & Guardian's politics editor. He sometimes worries that he is a sports fanatic, but is in fact just crazy about Orlando Pirates. While he used to love reading only fiction, he is now gradually starting to enjoy political biographies. He was a big fan of Barack Obama, but now accepts that even he is only mortal.
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