After the Bell: Mboweni halted SA’s downward spiral with reforms, bad shoes and garlic

All of a sudden, green shoots in South Africa can now be imagined. 

Although the economy is still flat-footed in many areas, growth of at least 2% in 2025 might be achieved. 

It sounds too good to be true as growth has languished below 2% since 2022 — levels not high enough to dent the joblessness crisis, boost investments into the country and, overall, improve sentiment.

For more than 200 days, SA has enjoyed life without Eskom power blackouts, something unimaginable because the country has been energy insecure for 17 years. The permanent end of rolling blackouts is likely to be announced at the end of this year. State-owned transport group Transnet is working on getting trains moving and ports more slick for exports. 

Arguably, this positive momentum can be attributed to Tito Mboweni, who died at the weekend after a short illness. 

Mboweni sowed the seeds of structural reforms that SA can now benefit from — more so if the Government of National Unity is serious about good delivery. Many things have been written about Mboweni, the larger-than-life former finance minister and number eight SA Reserve Bank governor. 

He has been eulogised for defending the central bank’s independence when it was under political attack, his commitment to fiscal discipline and sound economic policies, his awful choice of shoes, and his smothering penchant for garlic used in his nation-gripping dishes. 

Few people have reflected on the incredible role he played in developing economic policy, more so, the structural reform agenda. As the finance minister in 2019, Mboweni vexed his ANC comrades when he published a paper that made far-reaching reforms for getting economic growth going and reversing the country’s downward spiral. 

The story goes that ANC comrades were blindsided by the release of Mboweni’s paper, which fired a shot across the bows of the government.

Structural reforms are designed to change the fabric of an economy, and the regulatory framework in which businesses and people operate. They target network industries, including electricity, water, logistics and digital communications, as these are essential to restoring competitiveness, and unlocking investments and confidence so that the country’s potential growth remains above 3% in the long term. Reforms also make it easier for businesses to do business and, in turn, grow the economy and create jobs.

Mboweni’s paper recommended, among other things, selling off some Eskom coal-fired power stations, lowering the cost of doing business in SA, reducing red tape for small businesses and prioritising labour-intensive growth. 

However, one of Mboweni’s recommendations made the ANC uncomfortable. This was the recommendation that the government embrace the private sector and involve it in sectors of the economy monopolised by the state, including energy and logistics. 

Doing so, as Mboweni envisaged, will now see SA accelerate the renewable energy programme by acquiring additional electricity from existing independent power producers, and private sector players independently running Transnet’s rail and port network, while pouring capital to fix it. 

The ANC interpreted Mboweni’s recommendation as selling off the family silver to the private sector.

For decades, the ANC has been obsessed with the state holding power over the economy. There was also a big trust deficit between the government and the private sector during Jacob Zuma’s nine-year-long presidency, with the former keeping the latter on a short leash. 

So, some in the ANC immediately trashed Mboweni’s paper. Some even successfully lobbied for the Cabinet at the time to remove aspects of Mboweni’s offending recommendations when the final version of the paper was adopted by the Cabinet.  

Thankfully, Mboweni’s paper didn’t go to waste. It started an important conversation about seeing the private sector differently and admitting that SA’s failures are caused by the state’s lack of capacity to run the economy. 

Mboweni’s paper inspired the launch of Operation Vulindlela, a joint initiative between the Presidency and National Treasury, that over the past four years has supported and motivated government departments to implement several pro-growth and investment reforms. The private sector has been brought into the fold, lending its expertise and raising money for the government to deliver reforms and fix the country. 

Had it not been for Mboweni’s bravery and foresight, SA’s decline would have probably worsened. And alerts on our cellphones from Eskom about stage six blackouts would continue to ping. DM