Another finance minister, another chapter, in this growing book South Africa, “oh troubled” land.
Tito Mboweni, widely regarded along with his colleagues Gill Marcus and Maria Ramos to have been the architects of the financial direction we took after the 1994 elections, will have to call on the team again to assist him to whip this economy into shape.
He needs to also quickly resurrect those policies which saw the country start to move forward after years of isolation.
The South African economy needs foreign direct investment to make the country work, putting pay our ‘junk status’ that prohibits international institutions from investing in South Africa, which will make Mboweni’s job all that harder.
Good news is that he has been there before with Trevor Manuel.
This also raises the question, what role did Trevor Manuel, who is married to Absa’s CEO Maria Ramos, and a close ally of President Cyril Ramaphosa, play in the appointment of Tito Mboweni?
After all, they were once cabinet colleagues. Who would want the poisoned chalice of finance minister at this time? The positive though, the Rand strengthened on the news of Mboweni’s appointment.
Interesting, though, is to hear the world-renowned economist starting to talk about the demise of the global village, it would seem that the tide of change is coming.
We sit with Brexit, “America First” and now Brazil’s new president, sounding very much like Trump, and talking tough, and talking Brazil first.
What matters to you and I, though, is a job, an opportunity, money in the pocket, the prospect of a better lifestyle and future.
America with its lowest level of unemployment in 50 years at 3.7 per cent (imagine that for South Africa), would seem to suggest that “America First” is working.
It will be tested, though, by the upcoming midterm elections in the USA which will define the trend. A win for the Republican senators up for re-election would show support, and a loss would be a resounding no.
Democrats would then retake control of the Senate and veto all Trump’s proposals, which will lead to a reversal in economic gains, and further instability in the US, which in turn will flow into the world.
This will further negatively impact a very sick South African economy where even our own big corporates refuse to invest the R1-trillion lying on their balance sheets.
Considering big corporates have taken a ‘no confidence’ stance in the government, coupled with the ‘junk status’, this leaves a very tough task indeed for Tito Mboweni to navigate.
One political commentator has used the dreaded word‘austerity measures’, which is a phoney word used by governments who are in trouble. Greece is one such example.
Mboweni, how will you get the corporates to invest that trillion Rand in our economy?
Will you save South Africa, or will we be like our neighbour Zimbabwe, who are at a final shutdown phase?
Article by Derek Fox, CEO of the Aerotropolis Chamber of Commerce.
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