CAPE TOWN – The reappointment of Tito Mboweni as finance minister was an important signal to the market that the Cyril Ramaphosa-led government was committed to responsible economic and fiscal policies.
This is according to the Banking Association of South Africa (Basa), which said in a statement that it hoped Minister Mboweni would give rebuilding capacity at the National Treasury and restoring confidence in public finances his serious attention.
“Restoring the credibility of the National Treasury in the eyes of the investment community and other government departments will require much more ‘hands-on’ engagement by the minster,” the association said.
Intellidex head of capital markets research Peter Attard Montalto said the new cabinet had shrunk only marginally – signalling that a further shrinking reshuffle might occur in a year. He said it was broadly clean at minister level though there are clouds hung over certain ministers.
“We struggle however to see where there are real economic reformers, policy wonks and implementers entering cabinet and there are some poor decisions on merging energy and mining … meaning we don’t see this cabinet as ‘pro-growth’ but as largely status quo,” he said.
Montalto said David Masondo, who comes in as Deputy Finance Minister, could be being lined up to be a replacement for Mboweni. “He is seen as left wing and a key intellectual within the communist circles, he is a former chairman of young communists … He is viewed as bright and genuine though and should be an interesting interlocutor for investors.”
Basa said Masondo would have to work hard to win the trust and confidence of all South Africans in his ability to handle the public purse. It might fall to him to sort out the corporate governance failures at the Public Investment Corporation (PIC), which manages the retirement savings of public servants.
The finance minister and his deputy will also have to immediately start the hard work of drawing up a national budget for the new administration, which is fiscally responsible and provides for South Africa’s most vulnerable people, according to Basa. This will require some hard policy choices about pet projects and politically protected enterprises, among others.
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