New Finance Minister Tito Mboweni has to restore investor and market confidence in the country’s economy, address the current policy uncertainty, and influence the government’s political will to create a conducive environment for growth.
Several economists spoke with one voice yesterday, saying Mboweni would have to make investors comfortable to come to SA, amid questions surrounding land redistribution and corruption.
In addition he must find ways to minimise the general suffering among South Africans due to inflation, caused by a number of increases.
Andre Venter, economist and spokesperson at the United Association of South Africa, said Mboweni had no option but to stabilise the environment after Nhlanhla Nene’s resignation.
“He must then work on winning over the investor confidence – locally and internationally,” he said.
Sam Rolland, econometrician at Econometrix, an economic think tank, said President Cyril Ramaphosa had started economic recovery that included a stimulus package to rekindle growth – and it was important Mboweni acts on his plans.
“He must ensure government debt is contained. The debt that ran uncontrolled under Malusi Gigaba had contributed to the economic depression.”
Rolland said Mboweni must also take steps to reduce wasteful and corrupt expenditure in public institutions and departments.
“The Treasury must tighten controls on public spending. When they increased taxes recently, that did not help to increase revenue, because people always resist or avoid paying taxes.”
With the economy now depressed due to regular fuel price increases, caused by the rand’s depreciation and international oil prices, the consumers were hit hard.
“People have less income and spend less which impacts on job creation and economic growth,” he said. “We import oil and with the rand depreciating, our economy will suffer. This is what Mboweni has to take into account,” Rolland said.
Venter said should the government increase taxes again, that would worsen the situation.
“People are suffering out there due to inflation and fuel price increases. People have less to spend, unemployment figures would go up,” he said.
To succeed, Mboweni must have freedom to implement what he wants.