Tito Mboweni. Picture: SUPPLIED
Tito Mboweni. Picture: SUPPLIED

Despite irking   unions  for proposing that state-owned electricity producer Eskom shed jobs to stabilise its finances, newly appointed finance minister Tito Mboweni has got the thumbs up from one of the world’s leading economists. 

Former Goldman Sachs chief economist Jim O’Neill said on Monday that President Cyril Ramaphosa’s decision to appoint Mboweni as finance minister would go a long way to restoring the country’s international credibility, which has been wrecked by 10 years of scandal, uncertainty and allegations of corruption during Jacob Zuma's presidency.

“For him to appoint someone like Tito has to be a sign that he is trying to put in place a much-needed improved framework for policy,” said O’Neill, who said he knew Mboweni personally.

Mboweni, who will deliver his maiden medium-term budget policy statement on Wednesday, needs to take measures to pull SA out of recession without alienating the ANC’s trade union partners.

The National Union of Mineworkers Western Cape branch said Mboweni’s statement was “reckless”. Eskom’s problems were due to other issues such as municipal debt, rather than the size of its workforce, it said.

Mboweni was appointed finance minister on October 9 after  Nhlanhla Nene resigned for failing to disclose a series of meetings he had with the Guptas between 2010 and 2014.

Speaking ahead of a trip to SA next week, O’Neill said the government needed to re-establish the credibility of key financial institutions such as the central bank and finance ministry, which had been diminished under the Zuma administration.

“I can’t imagine someone with Tito’s credibility would take the role he has done without thinking he is going to have some influence and make decisions,” said O’Neill in a telephone interview on Monday.

“One of the things SA did in the first decade post-apartheid is it took inflation-targeting seriously, and it took having a sensible approach to broad fiscal policy seriously. In that sense, SA is probably a bit of a leader among the Brics countries. But in the past decade, particularly under Zuma, that deteriorated badly. That needs to be restored,” he said.