Banking on integrity

One Tuesday early in 1990, shortly after Nelson Mandela’s release, Gill Marcus got a call in the ANC’s London office from Lusaka.

”Gill,” said the caller, ”can you come to Lusaka on Thursday.”

”I said, okay, for how long?” recalled Marcus.

”Permanently,” said her colleague.

The caller was Jacob Zuma. He told her that if she couldn’t pack up her life of 20 years in London in two days, she could come on the Friday.

”No, it’s absolutely possible,” replied Marcus. She called her colleagues in the ANC office, packed her belongings in one suitcase and left.

When she got to Lusaka, Zuma told her: ”We’re going home.”

The South African authorities denied her entry and she had to wait another three months before arriving in the country she’d left as a 19-year-old.

In the past week Marcus may have felt a sense of déjà vu. She is too discreet to say when she first heard of her appointment as Reserve Bank governor, but the indications are that it was almost as sudden as her return to Africa.

President Zuma announced on Sunday that this formidable workhorse would succeed Tito Mboweni. By Monday she had cleared her desk at Absa Bank, where she has been board chairperson for two years, so there can be no hint of impropriety when she takes the reins at the bank in November.

When I spoke to her she was courteous but too savvy to allow interviews at this stage: she knows the often unintended future weight of words in such a delicately balanced country.

Yet there is no sign that she has changed the probity and tough realism that have marked her career since she was elected to chair Parliament’s finance committee 15 years ago.

Anyone who thinks she is a push-over for lobbyists of any kind overlooks her central role in stabilising the faltering, debt-ridden economy the ANC government inherited. Neither have they heard her on why institutions such as the Reserve Bank must be beyond reproach and above party politics.

Marcus spoke to me about these issues when I was researching my biography of Trevor Manuel. ”Going to the [Reserve Bank] was a really big step for me,” she said of her appointment as deputy governor in 1999. ”It was a very big decision because I take my work very seriously.”

She told then deputy president Thabo Mbeki: ”I am stepping down from all political office — because the institution cannot have people doubting that you have discussions outside that are party political.”

In 1994 Marcus summoned every government department before the finance committee — before Derek Keys, the finance minister at the time, had tabled the first post-liberation budget. ”We had a lot of resistance to that,” she told me. ”But I discovered the committee had in its original powers the powers of subpoena, and I simply said, fine, you will come and we will ask you; and therefore we could create that climate of accountability from the outset.”

Inspired by the Katz Commission, it was she who recognised the huge gap between potential and actual taxes and who pushed, as deputy minister of finance, for Pravin Gordhan to be appointed South African Revenue Service (SARS) commissioner.

”Gill got SARS sorted out and got Pravin in there,” Barbara Hogan, Marcus’s former finance committee colleague, told me. ”She separated SARS from the civil service so they could start paying decent salaries.”

She was also central to confronting South Africa’s huge debt.

There were pressures on the government to equalise public expenditure across racial lines, in education, pensions and health without increasing the debt load. Those who argued for more borrowing ”didn’t understand the numbers”.

Marcus, like Manuel and Gordhan, has no formal economics training — she holds a BCom degree. But she had studied the numbers. She told them: ”Guys, it’s simply not do-able. We’re borrowing more, we’re going to have to borrow to pay interest, and you’re not going to deliver a single thing that you need to deliver.”

She quickly disabused her party comrades of the notion that they had a ”blank slate — [that] we are now at a stage when we can do what we want because we have power — You had very narrow room to move.”

The massive tax shortfall had to be addressed. ”If we didn’t do that, we were likely to land up in the hands of the IMF — we certainly had not worked this hard for our liberation to hand it over to the IMF.”

”Brave” is the word Hogan uses to describe Marcus, both in Parliament and the ministry. Marcus’s relations with minister Manuel and then director general Maria Ramos were often tense — although she will not discuss this. ”What we had then is a single-mindedness of purpose because you were building a country,” she said. ”None of us were thinking, am I a glory boy or not. That was not in the equation — and part of the reason you would have certain tensions is that we were all unbelievably strong and driven people—”

They were a ”formidable team”, said Hogan. ”Thank God they were there, because they stabilised the economy — they achieved a bloody economic miracle.”

Another contribution to bringing the economy back from the brink was to put the Government Employee Pension Fund well in the black. Today its funds exceed R700-billion and South Africa is one of the few countries with a fully funded public-service pension fund.

As deputy Reserve Bank governor between 1999 and 2004, perhaps Marcus’s most critical role was the regulation and rescue of the banking system.

In the early 2000s a banking crisis threatened. First came Nedcor’s hostile bid for Standard Bank. Two years later Saambou was under curatorship and there was a run on the deposits of other banks, including BoE, one of the country’s ”big six”.

”She did an outstanding job — during the crisis,” said Tom Boardman, who was the chief executive of BoE in 2002 and is now Nedbank chief executive. Boardman worked late into the night with Marcus and the deputy registrar of banks, Errol Kruger, for weeks during the banking upheavals. That experience, Boardman said, ”helped us steer our way through the global banking crisis of last year, because we all learned some tough lessons then”.

Saambou went under without one depositor losing money.

For Marcus, the point was the quality of relationships with the banks and the treasury. ”The material question is that you can work together. That you trust one another enough, you trust [one another’s] judgment— The heart of it is building relationships.”

Marcus, who turns 60 this year, spent her early exile years working in her parents’ sandwich shop in Knightsbridge and later worked full-time for the ANC.

On a Sunday morning in 1982 security policeman Craig Williamson placed a bomb against her office wall. It was only because she was taking part in an anti-apartheid march that she was not there.

The lessons she has drawn from her involvement in the country’s public finances, she said, have been ”about integrity, trust, confidence” and developing relationships.

”I can’t think of anyone else,” said Boardman, ”who has a broader depth of experience and who has earned the right to head the bank.

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