Last night it was announced that the governor of the South African Reserve Bank (SARB), Tito Mboweni, will step down in November. The South African government has appointed Gill Marcus as his replacement. Ms Marcus will become the first-ever female SARB governor.
Ms Marcus is clearly part of the economic establishment in South Africa. She is a former ANC activist, but also a skilled policymaker – first as chairperson of the South African parliament’s Finance Committee and later as deputy governor of SARB. We think that the appointment is quite good news as we and others in the markets had feared that President Zuma would try to politicise the SARB management. Even though Ms Marcus is a former ANC activist, we see her more as a mainstream technocrat who is likely to more or less continue the monetary policy of Mr Mboweni.
The fact that Ms Marcus has been appointed as new SARB governor gives us some comfort that President Zuma is listening to the advice he is getting and it is positive that, until now, he has not changed the overall economic policy framework in South Africa – first by keeping former Finance Minister Trevor Manuel in the government in a role as ‘Economic Policy Czar’ and now by appointing a skilled technocrat as SARB governor.
If President Zuma stays on this track, he might be able to pull off a ‘Lula’ – i.e. do as President Lula has done in Brazil where he has gone from being perceived as a leftist populist before he was elected president to a market darling after being elected. The jury is still out on whether Mr Zuma can do this, but with the appointment of Ms Marcus he has taken a step in the right direction.
As for Mr Mboweni, he will surely be missed by most market participants and we will especially miss his colourful comments that have ensured that South African monetary policy has never been dull to follow. Apparently Mr Mboweni yesterday told reporters that he would spend more time fishing after he retires from the leadership of SARB. We wish him success in his new endeavours and hope that he will be as successful with the fishing as he has been as a central banker.
