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Tag Archive 'Tito Mboweni'

Jun 09 2009

Tension between Tito and Zuma government?

Published by under Opinion,Top Stories

Today’s announcement that the SA Reserve Bank got a new deputy governor revealed (yet again) the underlying tension in the relationship between governor Tito Mboweni and the government under president Jacob Zuma. [Read on]

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Dec 13 2008

Why I’m so negative on the rand – Part IV

Published by under More News,Opinion

This article was first posted to my old blog on 10/12/2007. I’m republishing it here as part of the on-going migration to my new blog. 

I’ve alluded to the “frail-Mandela factor”, the “populist-Zuma factor” and the “let’s-get-rid-of-Trevor-Manuel factor” as grounds for being bearish on the rand in the next 12 months. There are more reasons for being negative, of which the most important is the “let’s-get-rid-of-Mboweni factor”. This factor has the potential to destabilise the rand in the coming months like no other. 

(And strangely, to date the SA media have hardly mentioned it….) 

Tito Mboweni has been president of the SA Reservebank (central bank) since 1999 and has done an excellent job protecting the value of the rand, which is the primary goal of the central bank according to section 224 of the new Constitution of South Africa. 

The president of the SA Reservebank is appointed by the president of the national government for a 5 year period. Mboweni’s second 5-year term will come to an end in 2009, but the decision about the renewal of his contract for another 5-year period will most certainly have to be made already in 2008 – while Mbeki is still in the chair. 

How this decision is made and who is appointed as president of the SA Reservebank for the period 2009 – 2014 could be a major destabilising factor for the rand throughout 2008 – if it’s not handled carefully. 

For instance, if Zuma is selected as ANC president in the next few weeks and the appointment of the president of the SA Reservebank is NOT made by Mbeki next year, but postponed until Zuma is in the chair, this will make the forex markets nervous no end. 

And then, of course, there is the scenario where he is not appointed again, but a “more populist” candidate is appointed instead. Now, that would really cause instability. The worse case scenario: Trevor Manuel and Tito Mboweni go within months of one another. 

No, no, there is still another (even) worse case scenario: Mboweni, Manuel and Mandela all leave the stage within a few months of each other. But, let’s not sound alarmist. 

I couldn’t find anything in the Constitution, the Reserve Bank Act, or the regulations thereto, prohibiting Mboweni from accepting a third term. As far as I could make out, Mboweni could go on as long as he wanted to. And really, there is no reason to throw out a man who obviously knows what he’s doing. And is still very young. South Africa simply hasn’t got so many “potential central bank governors” hanging around, to just throw Mboweni out – and with him the government’s hard-won market credibility. 

Nevertheless, at this point it seems very, very likely to happen. In fact, in the next 18 months South Africa could be without it’s 2 best functionaries in the Mbeki era, namely Manuel and Mboweni. 

If the prospect of this happening doesn’t make the forex markets nervous in coming months, I’ll eat my hat.

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Sep 14 2008

Zuma for president – on one condition

Published by under Opinion,South Africa

Wow, things are coming to a point fast now. It seems, my guess in February that Mbeki won’t see this legislative period out as president, is about to hit the bull’s eye. Good for South Africa.  [Read on]

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Sep 12 2008

State of the State of the Nation speech

Published by under Opinion,South Africa

First published on my old blog on 10/2/2008. 

By now a lot has been written in response to Mbeki’s State of the Nation speech last Friday. But, I have a few observations not made anywhere else (as far as I could gather from the web).  [Read on]

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Sep 12 2008

Stranger than fiction

Published by under Opinion,South Africa

First published on my old blog on 4/2/2008. 

South Africa is an unusual place. That’s for sure. Some call it “a world in one country” and then they refer to the natural variety of the country.

I think of it as “a world of economic ideas in one political party” and then I refer to the strange thing called the African National Congress (ANC), which is home to the full spectrum of economic ideas (well almost), from the “market-accepting” variety to the hardest nuts of the communist variety.  [Read on]

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Sep 12 2008

A country where men are men, and the ANC is divided

Published by under Opinion,South Africa

First published on my old blog on 4/2/2008. 

Don’t be fooled by assurances that it’s all peace, unity and solidarity in the ANC. My gut tells me the opposite is true – just below the surface things are boiling. The situation is actually very “sensitive” at present.  [Read on]

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Sep 12 2008

Maybe, just maybe, things will turn out fine

Published by under Opinion,South Africa

First published on my old blog on 18/12/2007.

Some very welcome light in the tunnel. Here is an interesting, and relaxing article about something ANC man Ronnie Kasrils had to say today on economic policy after Mbeki had gone. All sounds very re-assuring.

Would have been better if someone with an economic or business portfolio had said it, but beggars can’t be choosers. [Read on]

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Sep 10 2008

The Dream Team

Published by under Opinion,South Africa

First published on my old blog on 10/12/2007. 

Come to think of it, should Ramaphosa “slip” into Mbeki’s chair in the way described below, South Africa might just be governed by the “Dream Team” soon.  [Read on]

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