With the departure of the esteemed Daniel Mminele from the Reserve Bank at the end of June, where he has been a deputy governor for 10 years, there is now a large hole at the top of bank.
It would be normal to expect that when a deputy governor steps down or his or her term ends that the president, who appoints the deputy governors on the advice of the finance minister, would announce a replacement. But both President Cyril Ramaphosa and Tito Mboweni were en route to Osaka when the Mminele announcement was made and there is no timeline from Ramaphosa’s office on when it will be made.
As a replacement has still not been named for another deputy — Francois Groepe, who suddenly left the bank in January — there are now two vacancies.
Add to this the fact that governor Lesetja Kganyago’s term ends in November and that of the only remaining governor, Kuben Naidoo, in March, the Bank will now be in a situation when the terms of all of the top leadership come up for renewal at more or less the same time. From a continuity point of view this isn’t desirable as these appointments should preferably be staggered for renewal.
The situation has not come about due to lack of action on behalf of the Bank. Mminele is believed to have indicated to Ramaphosa as early as February that he did not want to do another term. And the Bank also did its bit in succession planning by bringing in former Treasury head of economic policy Fundi Tshazibana as an adviser to the governors in February last year.
Tshazibana is considered a dead cert for one of the deputy governor positions. An economist by training, she has 20 years of solid public sector experience behind her in the financial sector. Her first job was as an economist for the National Energy Regulator of SA and then in the Treasury from 2003. In 2015 Tshazibani did a three-year stint with the IMF in Washington as a lead analyst of the financial sector of SA and 22 other sub-Saharan countries.
With credentials such as these as well as being the only woman in the top management of the Bank, it is puzzling why she has not yet been appointed.
Mboweni, who should do the legwork for Ramaphosa, would on Thursday not be drawn on his thinking. He has been known to voice concerns about the need for “a transparent process” in selecting new deputies. He is also said to be worried about the “treasurification” of the Bank as growing numbers of technocrats exit the Treasury for the calmer waters of the Bank.
But now with two vacancies it seems Mboweni will have no option but to look outside the Bank for another deputy governor. The other members of the monetary policy committee — the Bank’s chief economist Rashad Cassim and Chris Loewald, the head of policy development and research — are not strong contenders for deputy governorships. Both however are crucial to the Bank, particularly Loewald, who handles all the speech writing for Kganyago and his deputies.
Bringing in an outsider is not without its problems, particularly those of a political nature. The left political lobby was remarkably quiet on Thursday following the Mminele announcement but it could still make a noise over the need for change at the Bank.
With so much overt political opposition directed at the Bank’s ownership and mandate, there has been little discussion in political and policy circles about the monetary policy inclination of the MPC members. But with political desperation growing over the depressed state of the economy, some ANC bigwigs are starting to mutter about Kganyago’s hawkishness. Loewald is also regarded as a hawk and to some extent so is Tshazibanzi, who is not someone inclined to rock the boat. That leaves Cassim and Naidoo as the lone doves.
Will Mboweni be inclined to alter this balance? Judging from his own performance as governor, doves are not at the top of his concerns. In any event, the governors still have the space to appoint an additional Bank employee to the MPC to balance things as they see fit, as there can be up to four members in addition to the governors.
While we wait for Mboweni to send his picks to Ramaphosa, SA will have plenty to say about what sort of person would be the right one. Lucky that Mboweni couldn’t care less for political minefields. He has already marched right in.
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