Business Maverick

Business Maverick

Tito, on Twitter roll, warns it’s “game over” without structural reforms

Finance Minister Tito Mboweni. (Photo: Getty Images / Sean Gallup)

First it was dagga policy, now it’s structural reform. Whatever he’s smoking, Finance Minister Tito Mboweni maintained his Twitter roll into the early hours of Friday, throwing down the gauntlet of economic reform.

In the early hours of Friday morning, South Africa’s finance minister was at it again, tweeting that without urgent reforms, it was “game over” for Africa’s most industrialised economy.

“If you cannot effect deep structural economic reforms, then game over! Stay as you are and you are down graded to Junck Status!! (Sic) The consequences are dire. Your choice. Yep!! Askies!!,” Tito Mboweni tweeted. “You were warned and chose to ignore the wise warnings!!”

That was a reference to the prospects for looming ratings downgrades, notably from Moody’s, the only big ratings agency that still ranks South African debt as investment grade. Maintaining that rating looks increasingly doubtful in the face of an economy in meltdown, thanks in large part to apparent Eskom’s inability to do anything right.

Twittering Tito did not stop there.

“What are critical Economic Strategic Reforms? Read the National Treasury now Government Document! Let us move Forward! Many Steps at the same Time!! Movement!! No time for procrastinating!!”

And then this: “Structural Economic Reforms Inertia is frustrating. Let’s get on with it. Movement!! Many steps at a time!!”

The timing of all of this is interesting. Mboweni has made Twitter splashes before, but he has been relatively restrained of late, until Thursday 9 January, when he let rip with a series of tweets pledging to push for cannabis legalisation. Hours later he tweeted up his economic reform warnings.

All of this, of course, is taking place ahead of the governing ANC’s big 108th birthday bash in Kimberley, and President Cyril Ramaphosa’s reading of the annual January 8 statement, which should lay out some aspects of party policy. There is also a Cabinet lekgotla later in January, where Mboweni will no doubt press his case for reform. On Thursday, he specified that he would raise the issue of cannabis legalisation there. And of course, his 2020/21 budget will be presented to Parliament in February.

All of this comes against the backdrop of regular load shedding, rising unemployment, and an economy with growth prospects that keep getting whittled down. The World Bank this week slashed its SA economic growth forecast to 0.9% from 1.5%, citing Eskom’s woes as well as “persistent policy uncertainty, constrained fiscal space, (and) subdued business confidence”. It is these areas that Mboweni wants to address. Indeed, everyone from the ratings agencies to the Reserve Bank has been banging on about the need for structural reforms.

A draft Treasury document in August that spelled out reforms – such as competition for Transnet and a cutting of red tape – has since been adopted by the ANC’[s National Executive Committee. Its themes found their way into the Medium-Term Budget Statement, which outlined among other things big cuts to the public sector wage bill. Mboweni is coming across as a man who wants to get things done, and knows he has to act fast.

Expect political resistance from the ANC left, the unions, and the Zuma crowd that was complicit in State Capture. On one hand, the dagga proposal may not be such a hard sell to these groups, as it will likely involve booze and tobacco-style government regulation, control and taxation. A fly-fisherman, Mboweni may have a winning pattern here that they will rise to. But on the other fronts, he is wading into treacherous waters. BM

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