By Moipone Malefane
Tito Mboweni will be remembered for his pragmatic, fiscally conservative approach to managing the country’s economic challenges while he served as finance minister.
He has left behind a significant and multifaceted legacy. His career, which spanned decades in the public service, is marked by his efforts to stabilise the country’s economy, his role in shaping fiscal policy and his commitment to the broader principles of economic reform.
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However, to understand his legacy, it is important to consider his background, key policy decisions, challenges faced and the long-term impact of his work.
Before serving the country as finance minister, Mboweni was the governor of the SA Reserve Bank from 1999 to 2009, a role that shaped his understanding of economic governance and monetary policy.
His tenure there was notable for maintaining South Africa’s inflation-targeting framework and contributing to the country’s macroeconomic stability during a period of global financial uncertainty.
Mboweni’s return to government as finance minister in 2018 was seen as a moment of hope by many who believed his experience and steady hand could help South Africa tackle its growing fiscal challenges.
His tenure as finance minister was marked by his efforts to address the country’s mounting fiscal deficits, rising public debt and slow economic growth. One of his most significant contributions was his advocacy for prudent fiscal management, a stance that was often at odds with the more populist demands of some factions within the ANC.
His approach focused on reducing government spending and prioritising economic reforms to boost growth.
His 2020 budget, delivered amidst the Covid-19 pandemic, was a crucial moment for the country’s fiscal policy.
Mboweni implemented cuts to public spending and proposed a series of tax hikes to address the fiscal shortfall. The budget was a clear acknowledgment of the need for austerity, but it also emphasised the importance of maintaining the country’s credit rating and avoiding the risk of debt-driven economic collapse.
Despite these efforts, Mboweni faced significant opposition from within the ANC, with members pushing for increased spending on social programmes and bailouts for troubled state-owned entities, such as Eskom.
This struggle reflected the broader tension between the need for fiscal discipline and the pressures of political populism.
Another significant aspect of Mboweni’s legacy is his efforts to reform SOEs, which have long been plagued by inefficiency and corruption.
Mboweni inherited a situation in which SOEs like Eskom and South African Airways were financially distress, with Eskom’s debt levels in particular posing a serious threat to the country’s fiscal health.
Mboweni’s legacy will also be evaluated based on the long-term effects of his fiscal policies.
While tenure as finance minister under President Cyril Ramaphosa, was short, the challenges he faced were immense. He attempted to strike a balance between urgent social needs and the imperative to ensure the country’s fiscal sustainability, a task made difficult by pandemic and the entrenched issues within the public sector.
Despite his efforts, economic growth remained sluggish, and many of the structural reforms he advocated for — particularly in relation to SOEs and labour market policies — were not fully realised.
However, his legacy in advocating for fiscal prudence and economic reform will likely influence future economic policy, even if his immediate results were mixed.
His tenure as finance minister was not without criticism. Critics argued that his approach sometimes neglected the immediate needs of the most vulnerable in the country. His austerity measures, though necessary from a fiscal perspective, were often viewed as too harsh in the context of an economy ravaged by unemployment, inequality, and poverty.
Additionally, while he was a vocal proponent of privatisation and reducing the burden of SOEs on the public purse, many of his reform plans encountered resistance in the tripartite alliance, which is historically opposed to privatisation.
He was a committed advocate for controlling public spending, reducing debt and encouraging economic reform, even in the face of significant opposition.
While his tenure did not yield the kind of transformative results that many hoped for, especially in relation to SOE reform, his legacy lies in the principles of fiscal discipline and the recognition of the long-term economic dangers of excessive government spending.
Mboweni’s tenure highlights the complexity of governing in a country facing both deep structural problems and the pressures of a populist political environment.
His legacy will continue to influence South Africa’s economic policy as the country grapples with the challenges of recovery and reform in the coming years.
