SOUTH Africaâ€™s Reserve Bank Governor Tito Mboweni has implored South Africans and the media not to write his political obituary, but economists feel he was most probably just facing facts when he indicated last week he may not renew his contract when it expires in August next year.
The “about-face” on Tuesday when he said he would in fact be prepared to stand again if asked did not happen because, as some have speculated, the Zuma camp might want him to stay on. Instead it followed a weekend call from the presidency which was upset about protocol issues, an economist said on condition of anonymity.
Apparently, the behind the scenes reason for the Mboweniâ€™s re-statement was motivated by a complaint from the presidency that the post is a presidential appointment and consequently it was not his prerogative to speculate about the future.
A point Mboweni was quick to note at a press conference in Pretoria this morning, “The processes of appointing the governor of the Bank. In terms of section 4 (1) (a) of the South African Reserve Bank Act, the President of the Republic of South Africa appoints a governor of the Bank after consultations with the minister of finance and the board of directors of the Bank,”he said.
For the Zuma camp however, Mboweni continues to be seen as “out of touch”, and there is also an element of disappointment about his tough position on interest rates since he was previously a labour minister.
“Frankly, my feeling is that he will be going and he was sensibly flagging his intention to the markets that he intends to move on,” the economist said.
Itâ€™s early days and several names have been mentioned as possible successors, but currently the most likely successor from within the bank is executive general manager for markets, Daniel Mminele who is known as an interest rate dove, the economist said.
Mminele would probably be much more in line with the new political thinking, and would be more acceptable to Cosatu.
The thinking in the Zuma camp is “letâ€™s not make the same mistake again”, reflecting the disappointment with Mboweniâ€™s who is considered to have “hidden behind inflation targeting”.
Mminele is a long-time member of the Bankâ€™s Monetary Policy Committee and his most noted achievement was building SA reserves as head of the Financial Markets Department of the bank and closing out the forward book.
This achievement was recognised by the rating agencies and was a big contributor to SA achieving investment grade debt ratings.
Mminele might have a lighter touch on interest rates, but will not be a pushover.
He was in exile in Germany, and is schooled in the German tradition of pursuing inflation with a lot of vigour.
Another contender from within the bank is the more senior XP Guma, but he is considered unlikely because he is a citizen of Lesotho.
From outside of the bank, the name which gets mentioned the most is Sars Commissioner Pravin Gordhan, who is seen as having done a great job and who played a non-partisan role in the Zuma/Mbeki spat.
The decision only has to be taken next year, but our insider said it would be sensible to start discussing it now, since next year is likely to entail significant changes that the markets might have trouble digesting.
It remains early days, “but really, these are the only two names out there,” the economist said.
What about Mboweniâ€™s future?
There is some speculation that he would accept an ambassadorial post, with London being one of the possibilities.
If not, he certainly wonâ€™t be short of other options. Executive search expert Johann Redelinghuys, of Heidrick and Struggles, told Moneyweb, “A man like Tito would be a very good candidate to go on to a number of boards rather than one specific job.”
But, he added, “There is a great shortage in the banking sector and, if the right organisation made contact with him, he could well make a move.”
Leadership strategist, Tony Manning, agrees, “He would probably have a number of deals and directorships offered to him. So he would have to think quite carefully about taking up a single post.”
Communications specialist Clive Simpkins, however has a different theory, “I think the governor is feeling a little unloved,” he says, “I think he might have dangled a red herring in order to see what the public response would be.” â€“â€“ mw.