Analysis: Was Mboweni pushed or not?
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WAS HE pushed or was he not?
That is the question on many people’s minds following the shock resignation of Tito Mboweni as finance minister last week, hours before President Cyril Ramaphosa’s Cabinet reshuffle.
Political commentators believe Mboweni was pushed out following pressure by the once-powerful labour federation Cosatu and its political ally, the SACP.
Economists, however, say his political capital was all spent and had nothing more to offer to save the country from a fiscal cliff.
Intellidex’s Peter Attard Montalto said on Friday they believed Mboweni had been forced out by the SACP and Cosatu with Ramaphosa’s nod and did not in fact resign.
Attard Montalto said Cosatu and the SACP used the opportunity for a reshuffle to extract key scalps in the Cabinet because of the public sector wage bill issue and more general ‘austerity’.
He said that Ramaphosa, however, announced that Mboweni had ‘resigned’ in order to attempt to soothe the markets.
“Technically he may well have resigned but the key here are the political machinations and motivations,” Attard Montalto said.
“It also shows something very interesting and often overlooked about Ramaphosa, that he can take contradictory views – backing wage restraint but then, under pressure, taking actions that conflict with that.”
Mboweni’s tenure at the National Treasury was complex and fraught with friction between staff members at the Treasury and himself.
The Duke of the Duchy of Magoebaskloof, as he called himself, was someone who did not want to be in government, and had made it known to the market from the very beginning.
He was loved by investors for his fiscal conservative approach.
But he was loathed by public sector unions and some of his Cabinet and party colleagues for his insistence on austerity measures.
Mboweni previously butted heads with Public Enterprises Minister Pravin Gordhan over the continued funding of loss-making SAA, and also riled workers’ unions by pushing for the slashing of the public sector wage bill.
He also expressed contradictory views to the ANC on issues such as land expropriation, the independence of the SA Reserve Bank and the establishment of a state bank.
Cosatu on Friday issued a generic statement about the reshuffle, saying it hoped to see signs of a paradigm shift in how the government saw the role of the state in the economy.
But the SACP claimed victory, saying Mboweni’s macro-economic framework had failed to overcome the persisting socio-economic crisis.
“South Africa needs a macro-economic framework that will eliminate the colonial features of our economy and drive industrialisation as a key tenet of national production development to create employment, eradicate poverty, and systematically eliminate inequality,” it said.
“The SACP will continue pushing policy change in the interest of our people, especially the overwhelming majority, the working class, employed and unemployed.”
Mboweni’s triumph in Cabinet was his economic strategy paper in 2019, which called for structural reforms and inclusive growth, hoping to boost economic growth by an additional 2.3 percentage points above forecast over the next decade and to create at least a million jobs.
His last act as finance minister was to provide details of the R38.9 billion fiscal support measures undertaken by the government to assist individuals and businesses affected by the level 4 lockdown restrictions during the third wave and the recent unrest.
Always an eccentric recluse, Mboweni was someone who believed strongly in his views and could not be easily persuaded otherwise.
Anchor Capital’s investment analyst, Casey Delport, said Mboweni’s resignation would be a more fiscally negative move given his hard line on reining in expenditure.
“We expect the initial market reaction to be slightly negative,” Delport said.
“Nonetheless, Tito’s political capital was all spent and someone else who has the political capital to resist spending pressure is a positive move.”
Whatever happened prior to Mboweni’s sudden departure last week, he remained graceful and went to congratulate his successor during their swearing-in ceremony at the Union Buildings.
However, Mboweni’s late-night musings on Twitter, and his garlic-infested pilchard cooking show-offs, will surely continue as he jets off into the sunset to tend his land as a jovial civilian.
BUSINESS REPORT ONLINE