S.Africa Must Heed Mboweni Advice to Avoid Crisis, Kganyago Says

(Bloomberg) -- South African Finance Minister Tito Mboweni often publicly supports Reserve Bank boss Lesetja Kganyago on his Twitter account. Now Kganyago has also made it clear he also backs Mboweni’s policies and said that’s the way for the country to avoid a crisis.

Mboweni is facing the wrath of labor unions for plans he presented last week to trim the government wage bill as part of an attempt to rein in the budget gap and reduce debt.

“We can all shout at him and resist his proposals, and in the end he will at least have the satisfaction of being proved right,” Kganyago said in a public lecture at the University of the Free State in the central city of Bloemfontein on Wednesday. “Or we can follow his advice, solve this problem, and avoid a crisis.”

The two policymakers have a long history of working on together on different sides of economic policy. Kganyago was the director-general at the National Treasury for between 2004 and 2011 and Mboweni held the top job at the central bank for ten years until 2009. The finance minister even refers to Kganyago as “governor number 10” and himself as “governor number eight” in some of his Twitter posts with pictures of the two meeting for lunch.

“My friend, the Finance Minister Tito Mboweni is a man who says things that are true even when they are unpopular,” Kganyago “His message is that we have to reduce spending, and he is right to put this at the center of our macroeconomic debate.”

To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net

To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Antony Sguazzin

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