Tito Mboweni returns to the public service at a time when South Africa faces an unemployment crisis and low economic growth. (David Harrison/M&G)
ANC chairperson and Mineral Resources Minister Gwede Mantashe has welcomed Tito Mboweni’s appointment as finance minister saying he is the right man for the job.
On Tuesday, the former governor of the South African Reserve Bank was announced as South Africa’s new finance minister following Nhlanhla Nene’s resignation on Tuesday.
“He knows what he is going to be talking about, Tito is an economist. [He has a] wealth of knowledge [both] fiscal and monetary. He is quite a good economist,” Mantashe said.
“He has been in that cluster of the ANC he understands what we are talking about,” he added.
Mboweni is known for his radical stance on the need for “a deep-seated transformation” of South Africa’s economy.
In particular, he has been critical of the ANC’s ability to achieve radical economic transformation without ensuring easy access to capital for local businesses.
In 2014, Mboweni challenged the government to buy one of the major South African banks saying it was the only way to reach its desired economic transformation goals.
Mboweni was sworn in at a time when the government is trying to revive South Africa’s economy and is likely to approach his new job with the same radical thinking.
Just last month during an interview with CNBC Africa, Mboweni posited that reviving the country’s economy and avoiding a full-blown recession would require a number of radical solutions including trimming the size of the civil service.
Reducing the number of public servants is an issue government has been skirting around, despite an admission from numerous leaders that the wage bill is too high.
“It’s unpopular what I’m going to say, but you have to cut down the civil service. [It must be] smaller in number and [workers must be] better remunerated and the saving you make you plough into public works and infrastructure,” Mboweni added.
Mantashe would however not be drawn into commenting on Mboweni’s radical calls for transformation.
“He is capable. That’s all I can say. He will not do anything as an individual,” Mantashe said.
The outspoken 59-year-old native of Tzaneen in Limpopo began his political career as a student activist under the ANC.
In 1994, he was appointed South Africa’s first labour minister under former president Nelson Mandela’s administration. He earned respect within the labour movement when he introduced “progressive” labour laws under the labour relations act which protects employees against unfair dismissal.
In 1999, he became Reserve Bank governor serving in the position until 2009.
In 2014 Mboweni declined nomination to become an MP, saying he wanted to focus on “pushing economic transformation” through the private sector.
Now, Mboweni returns to the public service at a time when South Africa faces an unemployment crisis and low economic growth.
During his term as reserve bank governor Mboweni’s once positive relationship with labour deteriorated after a fallout with the National Union of Metalworkers (NUMSA) and trade union federation Cosatu.
Labour accused Mboweni of deepening socio-economic inequalities in South Africa due to his monetary policies and inflation targeting which aims to keep the rate between 3% and 6%.
Labour has problematized the reserve bank’s inflation targeting practices and called on it to change its mandate to become more developmental and create jobs.
Balancing this relationship with labour will be especially important for Mboweni in his new role, as tension around government’s planned cut on the wage bill and labour’s call for a renewed reserve bank mandate intensify.