South Africa finance minister quits in Ramaphosa reshuffle

South Africa updates

Tito Mboweni has stepped down as South Africa’s finance minister in a cabinet reshuffle carried out by President Cyril Ramaphosa that was also marked by the fallout from the worst unrest in the country’s democratic history last month.

Enoch Godongwana, an economic policymaker in the ruling African National Congress, will take over at the treasury after Ramaphosa said he had accepted a “longstanding request” by Mboweni to exit as part of the reshuffle, which was announced on Thursday.

Ramaphosa’s move also wielded the axe over the state’s response to what he has called an “attempted insurrection” last month that left more than 330 dead and wrecked businesses and infrastructure across Gauteng and KwaZulu-Natal, two big provinces.

The president said the security services had been “found wanting in several respects” during the unrest, which was sparked by the jailing of Jacob Zuma, the former president, for contempt of court. 

The police and intelligence services are widely seen to have failed to act on warnings that a factional battle for control of the ANC was about to break out into open conflict.

South Africa’s state security ministry will be abolished and oversight of intelligence placed with the presidency, Ramaphosa said. He also replaced his defence minister and announced an expert panel that will investigate the security shortcomings. The head of a previous probe that examined the decay and politicisation of South Africa’s spies under Zuma will also become national security adviser.

The change of finance minister comes at a critical moment for Ramaphosa’s attempts to revive Africa’s most industrial economy.

Mboweni, a veteran former governor of the South African Reserve Bank, became finance minister in 2018 just as the scale of damage to government finances bequeathed by systematic corruption and stagnant growth under Zuma was becoming clear.

He spearheaded attempts to contain a bloated public sector wage bill and costly bailouts for indebted state-owned companies, in order to avert what he warned was a looming sovereign debt crisis. Mboweni riled ANC trade unionist allies as a result.

The pandemic turmoil worsened the fiscal strain last year, sending debts above 80 per cent of gross domestic product. However, the commodity price boom has since boosted tax revenues more than expected.

Mboweni “effectively and ably steered the National Treasury through extremely difficult times, providing instability and instilling confidence,” Ramaphosa said.

For many years Godongwana has been the ANC’s head of economic transformation, a central position in the party’s policy battles. In 2019, he became chair of the Development Bank of Southern Africa, a government-owned regional lender.

Godongwana “has been reasonably well known to investors for some time” and “will bring to the role attributes that may strengthen the likelihood of reform in South Africa,” Razia Khan, chief economist for Africa and Middle East at Standard Chartered, said.

“Not least, there is his ability to work with other ANC constituents, winning them over in support of much-needed growth enhancing and fiscal reforms,” Khan added.

Ramaphosa said he had also accepted the resignation of Zweli Mkhize, the health minister who had been placed on leave after he was implicated in the alleged looting of pandemic-related resources. Mkhize, who denies wrongdoing, was replaced by his deputy, Joe Phaahla.

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