EDITORIAL: Leader, thinker and central banker of note
15 October 2024 - 05:00
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The late former finance minister Tito Mboweni in Tzaneen, September 15 2021. Picture: ELIZABETH SEJAKE/RAPPORT/GALLO IMAGES
In recent years, Tito Mboweni has probably been more famous for the eccentric and always entertaining cooking tips he posted on social media than for his legacy as an architect of SA’s macroeconomic policy.
There is no doubt, however, that with his sudden passing at the weekend SA has lost a political leader, thinker and central banker who not only implemented key elements of economic policy at key moments in the democratic era, but was also instrumental in crafting them.
He and a handful of others in the ANC’s early 1990s’ department of economic policy did the work and the thinking for the ANC government-in-waiting.
When the Mandela government came in, he was its first labour minister, overseeing the enactment of new post-apartheid labour legislation. He was then deployed to the Reserve Bank as a special adviser before he took over as governor in 1999. That he was SA’s first black central bank governor was significant. That he was the one to lead a complete overhaul of its approach to setting interest rates was even more so.
The department of economic policy team had helped to ensure that the bank’s independence and its price stability mandate were written into SA’s new constitution. Mboweni and then finance minister Trevor Manuel designed the inflation-targeting framework that gave effect to that, anchoring SA’s monetary policy around an inflation target that was transparent and to which the bank could be held accountable.
But even more important were the mechanisms Mboweni put in place to ensure that transparency and accountability: regular press conferences after each monetary policy committee meeting and regular monetary policy forums. All of that helped to “demystify” the bank, as governor Lesetja Kganyago put it this week. It put the governor — and more recently all the monetary policy committee members — on SA’s TV screens and popularised the work of the bank, opening its decisions to debate and scrutiny.
Many have forgotten the days of double-digit inflation and interest rates in SA. With inflation targeting and accountability, they are long gone, and much of the credit must go to Mboweni.
He deserves credit too for transforming the face of the bank and the way it operated — and for fiercely guarding its independence, both as governor and later as finance minister. He had a fiercely independent mind too. He was open to a wide range of ideas and inputs. He could legislate protections for labour yet later freeze public sector wages, as he did in 2019-2020, when as finance minister he held the line on fiscal discipline even during the worst of the Covid-19 crisis — but also put in place a new social grant for the most vulnerable.
Mboweni was a reluctant finance minister who was often absent. Yet he made sound and independent decisions when they were most needed — standing up to the public sector unions and the state-owned enterprises. And even before the Covid-19 crisis he intervened to try to halt the economy’s decline with an economic turnaround plan. It seemed maverick at the time but is now mainstream and has at last started to deliver on the economic reforms he envisaged.
SA is blessed to have had an economic policymaker of his calibre, independence and larger-than-life character. He will be missed not only by those who agreed with him but also those who did not, and he would have appreciated that.
We extend our condolences to his family, friends and colleagues.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
EDITORIAL: Leader, thinker and central banker of note
In recent years, Tito Mboweni has probably been more famous for the eccentric and always entertaining cooking tips he posted on social media than for his legacy as an architect of SA’s macroeconomic policy.
There is no doubt, however, that with his sudden passing at the weekend SA has lost a political leader, thinker and central banker who not only implemented key elements of economic policy at key moments in the democratic era, but was also instrumental in crafting them.
He and a handful of others in the ANC’s early 1990s’ department of economic policy did the work and the thinking for the ANC government-in-waiting.
When the Mandela government came in, he was its first labour minister, overseeing the enactment of new post-apartheid labour legislation. He was then deployed to the Reserve Bank as a special adviser before he took over as governor in 1999. That he was SA’s first black central bank governor was significant. That he was the one to lead a complete overhaul of its approach to setting interest rates was even more so.
The department of economic policy team had helped to ensure that the bank’s independence and its price stability mandate were written into SA’s new constitution. Mboweni and then finance minister Trevor Manuel designed the inflation-targeting framework that gave effect to that, anchoring SA’s monetary policy around an inflation target that was transparent and to which the bank could be held accountable.
But even more important were the mechanisms Mboweni put in place to ensure that transparency and accountability: regular press conferences after each monetary policy committee meeting and regular monetary policy forums. All of that helped to “demystify” the bank, as governor Lesetja Kganyago put it this week. It put the governor — and more recently all the monetary policy committee members — on SA’s TV screens and popularised the work of the bank, opening its decisions to debate and scrutiny.
Many have forgotten the days of double-digit inflation and interest rates in SA. With inflation targeting and accountability, they are long gone, and much of the credit must go to Mboweni.
He deserves credit too for transforming the face of the bank and the way it operated — and for fiercely guarding its independence, both as governor and later as finance minister. He had a fiercely independent mind too. He was open to a wide range of ideas and inputs. He could legislate protections for labour yet later freeze public sector wages, as he did in 2019-2020, when as finance minister he held the line on fiscal discipline even during the worst of the Covid-19 crisis — but also put in place a new social grant for the most vulnerable.
Mboweni was a reluctant finance minister who was often absent. Yet he made sound and independent decisions when they were most needed — standing up to the public sector unions and the state-owned enterprises. And even before the Covid-19 crisis he intervened to try to halt the economy’s decline with an economic turnaround plan. It seemed maverick at the time but is now mainstream and has at last started to deliver on the economic reforms he envisaged.
SA is blessed to have had an economic policymaker of his calibre, independence and larger-than-life character. He will be missed not only by those who agreed with him but also those who did not, and he would have appreciated that.
We extend our condolences to his family, friends and colleagues.
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