"It wouldn’t have happened in the old days," muttered a top financier in the FM’s ear at a function last week. Given the National Treasury’s withdrawal that day of a controversial circular that had been heralded as a huge relaxation of exchange controls, the banker was understandably aggrieved by the lack of professionalism shown by the National Treasury, the Reserve Bank and the Financial Sector Conduct Authority (FSCA).
The merits of the circular aside, the fact that it was ambiguous and failed to take into proper consideration the existence of SA’s prudential framework has had many wondering if the authorities were asleep on the job.
When Tito Mboweni replaced Nhlanhla Nene as finance minister in 2018, the FM said he was likely to be SA’s most colourful and opinionated finance minister since Trevor Manuel.
We underestimated him. High-handed and contrarian, Mboweni wins hands down as SA’s most colourful and opinionated finance minister ever — not to mention the worst cook to flaunt a garlic chicken dinner on Twitter.
The financial community has always loved Mboweni because he is unafraid to speak his mind, or to stand up to ANC bullies and vested interests. He has stated repeatedly that SAA should be closed and that pouring more money into Eskom was like "pouring water into a sieve".
But something has shifted over the past year or so. Perhaps it all started with that boozy, eight-hour lunch he gave the Financial Times on his Limpopo farm in April 2019. The FT described Mboweni as "by turns intellectual, bombastic and raucously funny". But not everyone was charmed.
A veteran economic policy expert, disappointed by Mboweni’s lack of professionalism, lamented that SA set the bar so low. "You have this opportunity to have an impact and you squander it because everyone else is [squandering it].
"It’s the new norm in government," she said to the FM at the time.
Mboweni’s idiosyncrasies wouldn’t be such an issue if the Treasury were the powerful institution of yesteryear. But it has bled talent during the state capture years and Mboweni has done little to rebuild it. If anything, some of his recent appointments continue to mystify.
This year has brought the exit of Roy Havemann, the chief director for financial markets and stability; Catherine MacLeod, chief director of macroeconomic policy; and local government expert Steven Kenyon. Two other senior officials are said to also be on the verge of leaving.
The financial community, which has always taken it for granted that the Treasury is unassailable, is unimpressed by its bungling of the exchange control matter. It heightens the concern that its stature is slipping.
Of course, the stature issue is also partly due to the lack of wholehearted support shown by President Cyril Ramaphosa and the rest of the cabinet, who have left Mboweni to wage a lone battle against saving SAA.
Now, if Mboweni also loses the battle to restrain the public sector wage bill, it will leave him little option but to quit at some point next year. (He says he would rather not be alive than experience a sovereign debt crisis, something which is certainly on the way, especially if wages are not cut.)
Clearly, the current situation — where the Treasury bleeds respect and skills and is forced to scramble around for funds to pay for others’ poor economic-policy decisions — is untenable.
SA is going to face a monumental fiscal crunch in the next year or two and, when it does, the FM would rather have Mboweni in charge than anyone else in the government. It is in the country’s interests that he and the Treasury bring their A-game from now on, and are fully supported.
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