PRETORIA (AFP) – South Africa’s President on Monday tapped deputy governor Lesetja Kganyago to lead the country’s central bank, hoping to reassure jittery markets after respected governor Gill Marcus resigned.
“It is my pleasure today to announced by decision to appoint Mr Lesetja Kganyago as governor of the South African Reserve Bank with effect of the 9th of November 2014,” said Jacob Zuma in Pretoria.
Kganyago has served as deputy governor of the South African Reserve Bank since May 2011. Previously, he served as director general of the National Treasury.
He now has the tough task of steering monetary policy in a country beset by chronic labour disputes, slow growth and an ever-widening account deficit.
In September, Marcus announced she will not be renewing her five-year term after guiding Africa’s most developed economy out of a recession in the wake of the global economic meltdown.
During her tenure, Marcus has with sober frankness criticised the government for failing to address systemic problems within South Africa’s economy and society – including unemployment and obscene executive wages – which are seen hampering growth.
In his acceptance speech, Kganyago said he would continue to follow in the footsteps of Marcus.
“I shall not disappoint,” he said, “I do not have to reinvent anything I just have to carry from where she has left.”
Kganyago praised Marcus’s leadership. “She has guided us through the dangerous forest that is the global economy,” he said. “She knows where the drinking holes are.”
“Elephants don’t forget, we will find those drinking holes because she has guided us through the forest.”
Economists welcomed Kganyago’s appointment.
“He will face a tricky challenge of balancing a weak economy against an inflation problem and large current account deficit,” said Andrew Jackson, senior emerging markets economist at Capital Economics, a London-based research company.
“All in all, further gradual interest rate hikes look likely,” said Jackson in an e-mailed statement.
“Kganyago came across as quite hawkish, commenting that interest rates needed to be raised to rein in inflation,” he said, citing Kganyago’s recent comments to media.
“It also seems like the government is willing to tolerate higher interest rates, with President Zuma stating this morning that the rand needed to be protected.”
Analysts in South Africa expressed hope that Kganyago, a longtime member of the country’s ruling African National Congress (ANC) party, will be able to promote the bank’s agenda with greater success than outspoken Marcus.
Kganyago has worked in the past as the ANC’s economic coordinator and accountant.
“A lot of people are underlining his one characteristic that he’s a politically astute chap,” said Ryan Wibberley, emerging market equity dealer at Investec in Cape Town.
“Maybe he’ll have more success in getting a better buy-in from the government.”