South African markets rallied after the appointment of former central banker Tito Mboweni as finance minister, an ANC insider and ally of President Cyril Ramaphosa expected to focus on wooing investors and reviving an economy in recession.
Mboweni, 59, replaced Nhlanhla Nene who stepped down after admitting having meetings with the Gupta brothers, friends of former president Jacob Zuma who are at the centre of corruption allegations. Zuma and the Guptas have denied any wrongdoing.
Nene’s removal was in line with Ramaphosa’s promise to crack down on corruption and boost economic growth.
Mboweni, like Nene, is from Ramaphosa’s inner circle, a former government official who has held positions in private companies. The rand, bonds and banking stocks rallied on Tuesday on news of the appointment.
His immediate task will be to help haul Africa’s most industrialised economy out of the recession it slipped into in the second quarter. Ramaphosa’s response was to shift government expenditure and launch an infrastructure fund to ignite growth.
Mboweni will oversee this recovery plan, starting with a medium-term budget speech on Oct. 24. Ramaphosa is also championing a drive to mobilise 1.2 trillion rand ($82 billion) in new investment over the next five years.
“He (Mboweni) is a strong appointment in that he combines an insider knowledge of how the ANC (African National Congress) works with an insider knowledge of the broader business and corporate community,” said Daniel Silke, director of Political Futures Consultancy.
“He represents continuity with the Ramaphosa faction within the ANC in their attempt to reboot the economy. He is a credible messenger of the Ramaphosa philosophy.”
Mboweni is also a member of the ANC’s National Executive Committee, which handles party decisions.