PETER BRUCE: Please don’t shoot the messenger, Tito

Perhaps it’s the pressure, the late nights, the general worry. I don’t know what it is but I’ve been trying to explain to myself why Tito Mboweni, the finance minister and former governor of the SA Reserve Bank (Sarb), would have a go at me on Twitter deep into the night on June 18 (or it could have been early in the morning of the 19th). One night last week, let’s say.

He had taken offence at what he implied was the increasing use, by myself, of the word “ludicrous” when referring to aspects of ANC policy or strategy or its actual actions or the lack of them. He found the word “ludicrous” a sign of contempt and disrespect, particularly coming from a white person and directed at a predominantly black organisation, the ANC. Was I not aware, he seemed to ask, how this might “land”.

There were two tweets. This one:

And then this one:

I simply retweeted what he had said because I think it’s fair to let people know when you’re being criticised as well as when you’re being patted on the back.

And I’m only writing about it now because the finance minister’s frame of mind is not unimportant ahead of the emergency Covid-19 budget he is due to present tomorrow.

For a start, I’ve always believed that I’m not responsible for the feelings of people who may or may not like something I’ve written. Until, that is, they tell me. If you tell me I’m brilliant I’m bound in some way to thank you. If you tell me I have hurt you personally my instinct would be to sympathise and apologise. So in this case I’m happy to apologise to the minister.

But I also have something to say. First, I write three columns a week, arguably more than anyone in the hemisphere. I went back two weeks (six columns) after reading the Mboweni tweets and could find no recent use of the word “ludicrous”. This led me to believe it had been in his mind for some time before he tweeted about me. I know I have used the word during the lockdown, probably to describe some of the rules the government has applied.

Also, when I write, I use the Chambers thesaurus on my iPhone and typing “ludicrous” on that gives me “absurd, ridiculous, preposterous, nonsensical, laughable, farcical, silly, comical, comic, humorous, amusing, hilarious, funny, droll, burlesque, grotesque, outlandish, zany, odd, eccentric”. So when he turns from the business case behind the latest R26bn SAA rescue plan to tell me how to speak to him, where does he find, as he then tweeted, “Ludicrous = sportive, idiotic/unthinkable”?

“Sportive”? Seriously? If I go beyond the phone app and pick up the full Roget’s thesaurus on my desk, I would indeed find “idiotic” in there along with hundreds of other, much more delicious, ways to insult the ANC including “ludicrous” as alternatives to “absurd”. But not “unthinkable” and certainly not “sportive”.

I don’t know whether the finance minister meant to do me harm but his tweets have a threatening quality about them. We have a strange relationship. This is not the first time he has been snippy with me but he can also be warm. Not many months ago he was suggesting a meal together.

Maybe it’s my tone but I think I’ll keep my distance. Not much choice anyway these days but if you don’t know whether someone is friend or foe, it may be best to assume the worst. Perhaps it is all the fault of the University of East Anglia, in Norwich, England, where he studied economics. He didn’t join the drama society, where he might have learnt to insult like Shakespeare. I found this beginner’s guide to proper insult drifting around the internet not long ago. It is a most useful project, even if all you do is remember a favourite or two.

That, minister, is how you insult someone. Meanwhile, we’ll leave you to go and put the finishing touches to your rescue budget. I truly have no idea how we come out of this with our sovereignty intact, whatever your party may instruct you.

How, for instance, do you cope with co-operative governance & traditional affairs minister Nkosazana Dlamini Zuma when she argues in court papers that the growth of the illegal cigarette trade under her lockdown ban on selling tobacco is beneficial and is more than happy to blow the sin taxes you should be collecting? How do you cope when your cabinet colleagues don’t think the problem you face is really all that serious?

There’s little question Mboweni is in trouble.

And just to really freak you out, Bloomberg had something of a scoop the other day with a story reporting that Mboweni had presented forecasts to Nedlac showing national debt levels rising above 100% of GDP by 2025 and to around 114% by the end of the decade.

As far as fiscal sovereignty is concerned, these are extinction levels of debt. They utterly crush any hope President Cyril Ramaphosa might have of changing the shape and nature of the economy post-Covid, as he continues to promise to do. And how on earth does any government, let alone an ANC one, continue to pay welfare to the poor and indigent when all its efforts are going to have to go into repaying debt?

If you don’t pay your debts you go bust. The finance minister is well aware. Going bust means someone has to rescue you and the only games left in town are the International Monetary Fund and the World Bank. The New Development Bank, the so-called Brics bank, is going to lend us $1bn, about R15bn, but there’ll not be much more coming from there. The Chinese aren’t stupid with their money.

It gets worse for the poor ANC and its allies, who have been making all sorts of plans to get the Reserve Bank to come to the rescue with a full-on programme of quantitative easing (QE). Under this the Reserve Bank would buy government debt until such time as it is no longer necessary. But, as it turns out, that would be over Reserve Bank governor Lesetja Kganyago’s dead body.

He told Wits University’s School of Governance that he wasn’t available for QE. “The constitution tells me the Sarb must protect the value of the currency, and that we must have regular discussions with the finance minister,” he said, according to Daily Maverick’s report. “Nowhere does it say I can set conditions. As such, the Sarb cannot take responsibility for solving a fiscal sustainability problem, nor can it jeopardise the value of the currency by agreeing to inflationary money printing.”

Ramaphosa can thank his lucky stars he has a Reserve Bank governor of this quality. And it is worth remembering that in the same position as governor, Tito Mboweni would probably have said the same.

Which rather leaves Ramaphosa looking for someone to put their hand up with an idea. Can you cut taxes to stimulate spending? How many state-owned companies can we close so they don’t cost any more money? How quickly can we get a million immigrants in here to replace lost skills and become employers? How do you stimulate an economic boom out of nothing, deep in debt and disease? The obvious answer would be to let the private sector build infrastructure that pays for itself (and its creators) for 20 years before handing it over to the state. But Ramaphosa wants a boom that has the state at the centre. It isn’t going to happen like that, which probably means it won’t happen at all.

There’s no more room, sadly, for magical thinking. An IMF bailout beckons and it’s no good blaming the pandemic. We were already well on our way. The virus has just speeded things up and the chickens are coming home to roost, big time. The only way out is hard work, austerity and discipline. I thought the Business Day editorial on Mboweni’s choices was spot on.

Unless … Well, sad to say it, but central bankers who stand up to politicians almost always lose in the end. What was that about Kganyago’s dead body? It happened to Europe’s most powerful central banker, German Bundesbank president Karl Otto Pöhl. He was forced to resign in 1991 after losing a public battle with then West German chancellor Helmut Kohl over how to merge the currencies of East and West Germany. Pöhl wanted two East German marks for one West German mark. The political leader wanted one for one.

In January 2010 the president of Argentina, Cristina Kirchner, demanded the Bank of Argentina hand over $6.6bn to help fund government debt. The central banker in charge was Martin Redrado. He turned her down and was fired pretty much on the spot.

I doubt it was a coincidence that the day before Mboweni tweeted about me being rude to the ANC he had also been tweeting about Redrado.

If Mboweni is in the mood to stand against insanity then he has a chance to start tomorrow. Not a cent for SAA (and I just dare any South African commercial bank to even consider lending money for the revival of SAA) and stand up for the Reserve Bank. The National Treasury may not be the most popular department in the state but it remains the most valuable. Let’s hope this budget keeps it that way.