Tito Mboweni is back from the political wilderness.
In a move that was cheered by markets, the former Reserve Bank governor returned to the cabinet for the first time since 1998, when former president Nelson Mandela deployed him to the Bank, before he took over after Chris Stals retired in 1999.
The rand and the country’s bonds gained as traders welcomed the appointment of Mboweni as finance minister.
During his 10-year tenure at the Bank, he stuck to his mandate to control inflation. His first big task back in government will be to present the medium-term budget statement on October 24, when he will want to reassure markets and credit-ratings agencies of SA’s fiscal health.
Mboweni’s dramatic return, to replace Nhlanhla Nene, comes after Nene was engulfed in a scandal about undeclared meetings with the Gupta family.
Nene, the first casualty of the Zondo commission into state capture, admitted in testimony last week that he had met the Gupta family at their business and residential addresses between 2010 and 2014, after previously denying seeing them outside official functions.
Speaking at Tuynhuys in Cape Town, Ramaphosa said Nene had submitted his resignation letter on Tuesday, saying developments around his testimony would detract from the work government was doing to re-establish public trust.
Mboweni becomes the fifth finance minister of the past three years, following a volatile period that included his previous axing in December 2015 by then president Jacob Zuma, to be replaced by little-known MP Des van Rooyen.
That move caused the rand to crash as investors pulled billions out of the country’s bond and stock markets amid concern that the Guptas’s alleged takeover of state institutions had reached the Treasury.
The market’s response was very different on Tuesday.
After earlier dropping as much as 1.4% to R15.06, the rand gained 1.2% to R14.67/$ by 6:30pm. Bonds also gained, with the yield on the benchmark R186 government bond maturing in 2026, which moves in the opposite direction to the price, falling to 9.15%, after earlier reaching 9.33%.
Ramaphosa said Mboweni would provide strong leadership. "As former governor of the Reserve Bank, Mr Mboweni brings to this position vast experience in areas of finance, economic policy as well as in governance," he said.
"Mr Mboweni takes on this responsibility at a critical time for our economy, as we intensify co-operation among all social partners to increase investment, accelerate growth and create jobs on a substantial scale.
"This moment calls for strong, capable and steady leadership that will unlock new opportunities as we grow and transform our economy."
Mboweni was sworn in immediately, and the new finance minister will attend his first cabinet meeting on Wednesday.
Born in 1959, Mboweni was a leader of the exiled ANC. He was appointed labour minister in 1994 and oversaw sweeping reform of the labour market.
After leaving the central bank, Mboweni served as an adviser to investment banking firm Goldman Sachs. He has been a director at the New Development Bank established by Brics and is a founding member of Mboweni Brothers Investment Holdings.
Mboweni also serves on the ANC’s highest decision-making body between conferences, the national executive committee.
Following his announcement, Ramaphosa touched on the work of the state-capture inquiry, which was central to Nene’s resignation.
He said it was important that the commission fulfil its work, that no person should be above scrutiny and that all relevant and credible accusations of wrongdoing would be investigated.
"It is incumbent upon any person who may have knowledge of any of the matters within the commission’s mandate to provide that information to the commission, to do so honestly and to do so fully," Ramaphosa said.
"For the country to move forward, we need to establish the full extent of state capture, identify those responsible for facilitating it, and take decisive steps to prevent it happening again."
With Karl Gernetzky and Sunita Menon
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