He leaves a legacy as a champion of labour rights, fiscal and monetary reform and prudent government spending
Tito Mboweni’s effect on monetary policy, labour legislation and public finance is being remembered as a cornerstone of post-apartheid South Africa.
Messages of condolence and tributes continue to stream in after Mboweni’s family announced that the former minister succumbed to a short illness on Saturday night, at the age of 65.
Despite his accidental contributions to pop culture with his late-night tinned-fish cooking escapades – and having hip-hop songs dedicated to him – Mboweni will mostly be remembered for his influence on the economy.
He was known for being a staunch advocate of workers’ rights, and pushed for the implementation of key legislation in this regard. He also modernised the country’s monetary policy framework and guided South Africa through the Covid-19 pandemic with stringent measures to tighten the public purse.
He was also a student activist, exiled in Lesotho.
Former Business Unity South Africa president Bonang Mohale told the Mail & Guardian Mboweni’s contributions — political and economic — spanned the almost 30 years he was in public service.
“He was exiled and a student at the University of Botswana, Lesotho and Swaziland, as it was formerly known, while in exile in 1985. There he headed up the ANC economic desk,” Mohale said.
After that, Mboweni was the chairperson of the national executive committee’s economic transformation committee, which coordinated the development of the ANC’s economic policies.
While in this role, Mboweni engineered, agitated for and orchestrated an economic framework that the country still uses, Mohale said.
“He was very blessed to start many things. He was not a maintenance guy; he started things from scratch.”
After the elections in 1994, Mboweni was appointed minister of labour in the first democratic dispensation under Nelson Mandela.
“He was among the five youngest ministers to be appointed by former president Nelson Mandela, at the age of 32, together with Geraldine Fraser-Moleketi, Trevor Manuel and Maria Ramos, among others,” he said.
While labour minister, Mboweni worked on improving the country’s post-apartheid legislation. This included the implementation of the Basic Conditions of Employment Act, the Labour Relations Act, the Mine Health and Safety Act and the National Economic Development and Labour Council Act.
“He gave the current labour workforce its status and role in South Africa so that they understood who they are as labour and the rights they have,” Mohale said.
Adrian Saville, professor of economics at the Gordon Institute of Business Science, said the labour policies were material and it was unfortunate that their positive effect could be overlooked because South Africa has a high unemployment rate, along with wage disparity and economic exclusion.
“What we shouldn’t overlook is the workers’ rights that were established and entrenched through his policy action,” Saville said.
Mboweni was appointed the eighth governor of the South African Reserve Bank in 1999. In this role, he established the monetary policy committee to increase transparency in the policy decision-making process.
“When he became governor, he was the first black person to have his signature on our money,” Mohale said gleefully.
Mboweni also introduced inflation targeting to help the bank maintain price stability. This framework is still in use today, with the inflation target set at 3% to 6%.
Saville said when Mboweni became Reserve Bank governor, South Africa had just gone through the 1990s emerging market crisis and was dealing with double-digit inflation. The expectation was that it would run on.
“When that inflation expectation is ingrained in the economy, it’s very difficult to break. That three to six percent targeting broke the belief that inflation in South Africa would always run at an elevated rate. Low, single-digit inflation has benefits across society, but more so to those who are vulnerable, which is the unemployed and the poor,” Saville said.
Mboweni was governor for 10 years, until 2009. He then took a break from active politics, although he remained a member of the ANC.
In 2018, when the country was experiencing “Ramaphoria” after the election of Cyril Ramaphosa as president, Mboweni was appointed minister of finance.
He proposed a three-year wage freeze for public servants from 2020 to rein in government expenditure and debt.
In his 2019 medium-term budget policy statement, Mboweni said the average wage increase across the government was 6.8% in 2018-19, or 2.2% above inflation. After adjusting for inflation, the average government wage had risen by 66% in the past 10 years.
But, said Saville, “It’s hard to gloat about those achievements because South Africa has not been successful in reforming our public sector wage bill. We sit with a very elevated public sector wage and the outputs from that elevated wage bill are not evident.”
He added that the finance minister was not responsible for delivery but for how much effort was placed on effecting delivery. And here, he said, South Africa continues to be hamstrung in its endeavours.
During his time as finance minister, Mboweni was known for his fiscally conservative, and thus unpopular, austerity budgets.
“He said we must be very mindful and thoughtful as to how we use the public purse. Driving around with an entourage of 10 cars is not on and he led by example.
“Many a meeting, I would see him coming out of his private car. He was comfortable using public transportation. I met him on the train, one time,” Mohale said.
Business for South Africa chairperson Martin Kingston said Mboweni played a critical role in working through the ramifications of the pandemic, which the country entered having been downgraded to junk status.
“We needed to contain our spending and increase our revenue and he absolutely focused on making sure that we all understood that and that wasteful expenditure of any type, including by the state, should not be tolerated.
“Those were hallmarks of a charismatic, pragmatic, albeit enigmatic, individual who was larger than life, who was at a personal level caring, thoughtful, sympathetic — and that’s how I experienced him.”