Mixed reaction to Mboweni appointment as finance minister

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JOHANNESBURG, October 10 – The appointment of Tito Mboweni as South Africa’s new finance minister triggered a mixed reaction on Wednesday, with one political party welcoming his previous experience in government and at the central bank, while another said his views on the economy may not be as “market-friendly” as first assumed.

President Cyril Ramaphosa on Tuesday appointed Mboweni to replace Nhlanhla Nene who resigned over his meetings with the controversial Gupta family at the centre of a probe into state graft. Nene denied helping to further the Guptas interests but conceded he should have been more upfront about his encounters with them.

The African Christian Democratic Party (ACDP) said Mboweni’s appointment would calm markets and provide confidence to foreign investors given his previous stints as a cabinet minister and central bank governor.

“He will no doubt adhere to strict fiscal consolidation measures required to stabilise state finances and inspire investor confidence in the economy,” the party said, noting that the rand had strengthened after Mboweni’s appointment.

The currency, which had breached 15.00 against the U.S. dollar due to both domestic concerns and the global impact of trade wars, was on firmer ground at 14.65 on Wednesday.

The main opposition Democratic Alliance, however, took issue with some of the sentiments Mboweni had previously expressed, including a post on his Twitter page which said the state must own 40 percent of all mining companies.

“What is not clear is whether this was a flirtation with “radical economic transformation”, or a conversion to ‘radical economic transformation,” DA shadow minister of finance David Maynier said.

“We now need to know whether the minister actually supports extending state-ownership in the mining sector, establishing a state-owned bank and creating a Sovereign Wealth Fund, which may have major implications for investment and job creation in South Africa.”

He said Mboweni should explain his views or face a grilling on them at his first appearance before the finance committee following the medium-term budget policy statement in Parliament.

The ACDP urged Ramaphosa to follow through on his commitment to good and clean governance by considering removing other “far more contentious ministers” than Nene.

– African News Agency (ANA)