Tito Mboweni: Goodbye to one of the most consequential leaders in SA

The business community and government departments where he worked have lauded the legacy of Tito Mboweni after he passed away on the weekend. He was a consequential leader who played a major role in economic policy in South Africa, a finance minister who always carried an aloe in a pot to his budget speech in parliament to demonstrate the resilience of the South African economy.

Mboweni spent five years as minister of labour in Nelson Mandela’s cabinet, 10 years as governor of the South African Reserve Bank (Sarb) and three years as minister of finance in President Cyril Ramaphosa’s cabinet.

The Bureau for Economic Research (BER) says Mboweni was arguably one of the most consequential economic policymakers in South Africa and drove several significant economic reforms. “As the first minister of labour in the new democratic South Africa, he took several steps to improve the business-labour relationship.

“Major legislative reforms included the Basic Conditions of Employment Act, Labour Relations Act, Mines Health Safety Act and the NEDLAC Act, designed to improve cooperation between the different constituencies of labour, business and government.”

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Mboweni targeted inflation

After he was appointed as the eighth governor of the Sarb in 1999, Mboweni introduced inflation targeting and presided over the first monetary policy committee meetings to determine the repo rate.

Reforms included introducing a monetary policy statement outlining the reasons for the Sarb’s decisions. These were televised, bringing new transparency to the conduct of monetary policy. The BER points out that before this, the Sarb targeted monetary policy aggregates and its communications were made through long-printed documents.

The BER worked closely with Mboweni and the Sarb to introduce a survey of inflation expectations. “Today, despite nearly two decades after introducing the inflation targeting system, inflation expectations remain comfortably within the band and several economic shocks have been born out of the system’s wisdom.”

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Three consequential decision about economic policy

Mboweni made three consequential decisions in South Africa’s economic policy trajectory, the BER says:

• The first was the decision to freeze government wages in 2019, which occurred in 2020. He was alarmed by the rapid and unsustainable increase in government wages. Together with slowing economic growth, this led to a fiscal position that was deteriorating at an alarming pace. The wage freeze ultimately started the slow return to the fiscal rectitude that had been the hallmark of the pre-Zuma era.
• The second was the publication of a paper on economic growth, also in 2019, known officially as Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa and unofficially as the “Tito Paper”. The paper set out a programme of much-needed economic reforms, including steps to lift the restrictions on private power generation, rail, telecommunications and ports.
• The third was the introduction of a comprehensive response to the Covid-19 pandemic that had a significant positive impact on the lives of millions according to research by the NIDS-CRAM initiative, led by Dr Nic Spaull of Stellenbosch University.

The BER says Mboweni was a frequent participant at BER conferences, where his engaging speaking style made him a popular drawcard. “His love of red wine and engaging conversation made him a popular visitor to both Stellenbosch and the BER.”

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Reserve Bank: driving economic transformation

The Sarb says in a statement that Mboweni’s passing is a great loss to South Africa, the continent and the global economic community. “He played a meaningful role in driving economic transformation and social change throughout a distinguished career.

“Mboweni guided South Africa through periods of great uncertainty, with a steady hand on the economy during the global financial crisis of 2008 as governor and later shepherding the country’s finances through the challenges of the Covid-19 pandemic as finance minister.”

The Sarb says he is renowned for his role as South Africa’s first black governor, a position he held for a decade from 1999 to 2009. “He was a passionate central banker and played a key role in building the Sarb into the professional, formidable and purposeful organisation it is today.

“He advanced the modernisation of the Sarb at large, including the national payment system, strengthened internal governance processes and built a strong and sustainable leadership team. We will miss his candour and sharp wit, which endeared him to many.”

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Rebuilding Sars after state capture almost destroyed it

The South African Revenue Service (Sars) also paid special tribute to Mboweni who was Sarb governor while Pravin Gordhan, who passed away recently, was commissioner of Sars. “It was this decade of stability in leadership, along with Trevor Manuel as minister of finance, that helped Sars in its strategic repositioning and modernisation as a world-class revenue authority,” Edward Kieswetter, commissioner of Sars, says.

“Mboweni willingly made the sacrifices necessary to realise our goal of freedom in a non-racial, non-sexist and democratic order. His generation was known as the ‘young lions’ because of their bravery and selflessness.

“His leadership as minister of finance came at the most important juncture in the history of Sars after it had suffered a deliberate and systematic decimation of its governance in pursuit of corrupt intent. Since May 2019, I had the pleasure of working alongside him as we started the journey to rebuild Sars, after the period of state capture.”

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Leader of integrity for the business community

Prof Raymond Parsons, economist at the NWU Business School, says Mboweni brought his tough skills and experience to bear on policy decision-making in South Africa. “He was a leader of integrity and interlocutors would know where they stood with him in debate.

“On behalf of organised business, I had regular interaction with Mboweni in the early years of South Africa’s democracy but later more closely in his position as Sarb governor when I was on the Sarb board of directors. His robust grasp of the country’s political economy was always in evidence and he forcefully defended the Sarb’s autonomy.

“Overall, as a dedicated public official over many years, Tito Mboweni leaves a tangible economic legacy in South Africa.”

Alan Mukoki, CEO of the South African Chamber of Commerce and Industry (SACCI), says throughout the years and in various high-profile roles Mboweni was a man who operated with integrity. “He was known to have a sharp intellect, was transparent in his dealings with collective business and had a deep understanding of matters affecting his portfolios, South Africa and its economy and its challenges.

“Tito Mboweni was a thoughtful man who positively lifted the profile of the government institutions he led. He made a significant impact and contribution to South Africa and was highly regarded in the global financial system.”