Mboweni – let’s go about things differently

The arrival of Tito Mboweni, South Africa’s latest minister of finance, at the annual conference of the Association of Black Investment Professionals was met with an awed hush; the kind of silence reserved for those who both change history and form a fundamental part of it. His speech, however, was a triumph in humour and a rare insight into the challenges that face South Africa and the challenges he has inherited as the new finance minister.

“When Cyril Ramaphosa, our president, called me to ask if I would become the new finance minister I told him we need young people,” said Mboweni. “He told me that he wasn’t asking for my advice, he was asking me to take on the job. I was bullied into submission and I was grumpy about it. Then, he bullied me into coming here to talk about the role of the financial sector in South Africa’s economy.”

For Mboweni the answer to this question was simple: “You know this. You know your role. I believe that if we are really serious about access to capital to drive the economy we must think about how to support the small, medium and micro enterprise (SMME). In Germany, the economy is driven by the hidden champions, the SMMEs. While they depend on the larger enterprise for contracts to some extent, it is their agility and dynamism that drives things, and we need to focus on that.”

The question that Mboweni raises is a pertinent one. Where will the SMME get its money? And he replies by confessing that the government made a mistake in the 1990s when it engineered the demise of the Small Business Development Corporation (SBDC).

“It was a huge mistake. Trevor and I accept that responsibility,” he adds. “It was a concentrated vehicle to support the SMME and maybe now it is about time we went on our knees and re-engineered the SBDC.”


Mboweni did not shirk the hard questions and perhaps one of the most prevalent was the belief in the validity of a state-owned bank. He admitted that in the past this had been something he had supported, but today his view has changed.

“There is a concern that a state bank would just become another source for a heist,” says Mboweni. “My enthusiasm for this idea has subsided because of these heists. To fix our economy we need to sort out our financing and recognise that institutional investors are key. And the existing banks need to cross the Rubicon and recognise that we face a structurally different economy to the one we faced in the 1990s.”

Mboweni emphasised the importance of changing thinking, looking to renew commitment to sectors that require support and paying attention to how society has changed.

“The financial sector needs to think more about where the growth in the economy is going to come from, and which economy we are currently oiling,” concludes Mboweni. “There’s a major demographic shift where most of the population lies in urban or peri-urban areas, and we have to stop thinking the way we did in the 1940s and the 1950s. We are in a different society.”

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Tamsin Oxford
Tamsin Oxford
I am a professional editor, journalist, blogger, wordsmith, social junkie and writer with over 19 years of experience in both magazine publishing and Public Relations.

Related stories

Emergency hospital: Gauteng’s potential R500-million albatross

Construction of an emergency Covid-19 hospital is running months behind deadline, promising to come online only after Gauteng’s peak

Why insurance firms’ earnings are down

Covid-19 has hit the insurance industry especially hard

Say hello to lockdown lite

After months of the strictest Covid-19 restrictions in the world, it seems we are in line for a further easing of the regulations

Jobs at stake as financial losses hit ArcelorMittal

South Africa’s steel producer’s earnings dropped in the first quarter of 2020 because of low demand and a lacklustre economy, exacerbated by the Covid-19 lockdown

Black Lives Matter: The South African economy’s unfinished business

Tshegofatso Mathe spoke to people in the South African business world about structural racism in our economy, and what must be done to overcome it

Jury’s out on green recovery

Public-private partnerships and big infrastructure builds have been suggested as ways to boost South Africa’s flagging economy. Another option to consider is green bonds, which would also help achieve climate crisis goals
Advertising

Subscribers only

Toxic power struggle hits public works

With infighting and allegations of corruption and poor planning, the department’s top management looks like a scene from ‘Survivor’

Free State branches gun for Ace

Parts of the provincial ANC will target their former premier, Magashule, and the Free State PEC in a rolling mass action campaign

More top stories

Air pollution link in 15% of global Covid-19 deaths

Researchers have found that, because ambient fine particulate air pollution aggravates comorbidities, it could play a factor in coronavirus fatalities

Mboweni plans to freeze public sector wage increases for the...

The mid-term budget policy statement delivered by the finance minister proposes cutting all non-interest spending by R300-billion.

SAA to receive R10.5-billion government bailout after all

Several struggling state-owned entities received extra funds after the medium term budget policy speech

BMW X3 thrives in the M stable

The compact SUV is so at home with its new badge that’s it’s surprising it didn’t happen sooner
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday