06 November 2009
	THE RESERVE BANK Farewell By Thebe Mabanga Leaving a credible track record, SA's top banker passes the baton

Reserve Bank governor Tito Mboweni's departure from the Bank - but more specifically the Monetary Policy Committee (MPC) - marks a departure of a distinct kind of leadership. "He used leadership rather than power," is how Renosi Mokate, deputy governor and MPC member for the past five years, describes his style of leadership at the committee whose work is arguably the most visible by the bank. Tito Mboweni She says Mboweni could have used his power as chair of the committee to simply impose his will. Instead, he allowed members to apply their minds, make their input and reach decisions by consensus. Mokate also has praise for the way in which Mboweni allowed space for the bright technocrats, who provide the committee with information, to develop their own approach. Yet he was always at hand to ensure that the information provided is technically sound. He was also willing to push and provide guidance using his lessons and observations from his work at forums such as the Bank for International Settlements. Mboweni's defining policy achievement has been the successful implementation of the inflation targeting policy. The process got off to a tricky start with the December 2001 rand crash, which tested the Bank's credibility and commitment to the policy. Mboweni resolutely stuck to his policy guns, with the backing of the then finance minister Trevor Manuel, choosing instead to patiently explain the benefits of stable prices to the wider economy. Trevor Manuel Another notable policy achievement was the closure of the Net Open Forward Position in May 2003, after years of being a source for the rand's volatility. The closure paved the way for the accumulation of reserves, a key contributor to stable finances. Mboweni was once asked whether he saw himself as a "people's governor" especially in a country with high levels of illiteracy - especially financial and economic illiteracy - as many people may feel no connection to the economy due to lack of jobs. He said his concern was not his popularity but that people, from small business owners to pensioners, understand the importance of stable prices in their financial planning and how it affects their daily lives. WHAT IT MEANS Implementation of inflation targeting a defining policy achievement One of his favourite observations was that as a central banker you have to be a banker and a politician. He successfully blended the two roles, taming and assuring markets with sound policy and keeping demands for growth-fuelling cuts at bay. But of course his enduring legacy will be the role he played alongside Manuel's management of the economy and former SA Revenue Service commissioner and now finance minister Pravin Gordhan's leadership of improvement in revenue collections. The trio presided over the longest period of economic expansion on record in SA. His standing on the international stage, both on the continent and in the rest of the world, has been significantly enhanced. He spent his last weekend in office, at the beginning of November, with reserve bank governors from the SA Development Community countries. Pravin Gordhan Mokate also notes Mboweni's leadership in the role the bank has played in institutions like the G20, in which she actively participates. She says the group represents systematically important industrialised and developing economies. She says though SA shares information with these economies, it is important to ensure that deliberations on such forums do not leave behind low-income countries, a significant number of which are in Africa. Mokate says an equally important role that the bank plays is to serve as an example to other countries of how robust bank supervision and regulation can help shield countries from the economic meltdown that has engulfed many parts of the world. This is through proper implementation of accords such as those of the Basle Committee on Banking Supervision. Much of the mordernising work has taken place under Mboweni's stewardship. Mboweni was born in Tzaneen, in what is now Limpopo, about 50 years ago this year. He left SA to go to exile in Lesotho in 1980, after briefly studying at the then Turfloop University. That was where he joined the ANC, and also where he completed his economics honours. He furthered his studies at the University of East Anglia in the UK. After the unbanning of the ANC in 1990, he was appointed deputy head of the department of economic policy in the ANC. He then served in both the ANC's National Executive Committee and the National Working Committee, and served as the country's labour minister under former president Nelson Mandela's cabinet. He resigned from political office to take over from Chris Stals in 1998, before officially succeeding him a year later. Now that extraordinary journey reaches a remarkable conclusion as SA bids farewell to its top banker and certainly one of the most admired figures in the democratic dispensation. A key feature of Mboweni's tenure has been the diversity of talent that has served on the MPC. Mokate and Xolile Guma bring academic rigour and wide ranging experience. For a few years, the committee had Ian Plenderleith, who brought extensive international central banking experience. The elevation of the bank's economist Monde Mnyande and Daniel Mminele a few years ago was seen as a bold fusion of new blood and fresh ideas to the committee. Francois van Zyl and Brian Khan bring extensive internal experience. Even incoming governor Gill Marcus has had some time on the committee, thereby ensuring that there is continuity at the bank.