Mboweni: The world has changed, we must change our mindset about the economy

2018-10-21 09:52 - Lameez Omarjee, Fin24
 Tito Mboweni, takes his oath of office after bein
Tito Mboweni, takes his oath of office after being appointed minister of finance on October 9, 2018, at the Tuynhuys parliament compound in Cape Town.(Rodger Bosch / AFP) ~ AFP

SA's approach to tackling economic issues has not changed since the 1980s, even though society's structure has fundamentally changed, said Finance Minister Tito Mboweni.

The new finance minister was speaking at the second annual Kader Asmal memorial lecture at the Cape Peninsula University of Technology on Saturday. Former Finance Minister Trevor Manuel had delivered the key note address at the inaugural lecture last year.

During a question and answer session following his address, Mboweni shared thoughts on stimulating economic growth.

"Conceptually we have a problem - because most of our thinking processes have not gone beyond the 1980s, yet our society has been transformed quite fundamentally," he said.

"The world has moved, we are in the WiFi generation now." The task is to respond to the "fundamentally changed" structure of the economy, he explained.

The education system has not responded to the changed structure of society – as a result graduates cannot be "absorbed" in the economy, Mboweni added.

There are certain basic prerequisites for economic growth and these include policy certainty and stability, institutional strength and independence, a strong judiciary and an independent, strong media which is critical but fair, and not gossip, he said.

"The Sunday Times was involved in a scheme to destroy key institutions."

The minister also said there needs to be a human capital development strategy and technological penetration – these prerequisites are key to drive economic growth.

He also encouraged students to consider the example of the German economy- which is dependent on small and medium enterprises.

Even though Germany has car manufacturers like Mercedes and BMW – the "real drivers" of the economy are its small and medium enterprises, he stressed.

Mboweni left before the programme was completed - to work on preparations for the mini budget to be delivered on Wednesday. Deputy Minister Mondli Gungubele fielded the remainder of the questions.

Mboweni said the topic of economic growth would come up in the mini budget.

* Visit Fin24's 2018 mini budget hub for all the news, views and analysis.

 * Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER