South Africa: Never Let a Good Crisis Go to Waste - COVID-19 and Mboweni's Hallelujah Moment

South African currency
analysis

The impacts of Covid-19, the moves to close down much of the country and major parts of the economy, and the downgrade by Moody's have once again led to the ultimate South African discussion: What to do about the economy? So huge is the scale of the problem, so sharp the likely downturn, and so worried are policymakers, that the question is now being asked: Is this the crisis that necessitates the reform?

On Sunday night, during a teleconference with journalists, Finance Minister Tito Mboweni said that his conversation with President Cyril Ramaphosa about the Moodys downgrade led to his "hallelujah" moment. He claimed Ramaphosa told him that this was the moment that reform now needed to be implemented. Mboweni, always confident, also said: "And I know we are going to succeed."

For years there have been cries for reform, from rating agencies, banks, business organisations, and many other influential groups. It simply did not happen.

Considering the urgent need for this reform, and that there are more young people out of work than with jobs, it should not be forgotten why this reform has not happened. To oversimplify, there has been a "political lock" on reform. So broad is...

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