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AfricaApril 3 2005

TREVOR MANUEL, Minister of Finance, South Africa

Successive presidents’ willingness to retain Trevor Manuel allowed time for harsh policies to bear fruit.
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Without the backing of President Nelson Mandela and then President Thabo Mbeki since 1999, Trevor Manuel would not have had the influence to implement the policies that have transformed South Africa’s national finances. Indeed, successive presidents’ willingness to retain Mr Manuel in the position – close to nine years now – not only established continuity of policy but built confidence in the finance minister, allowing time for harsh policies to bear fruit.

And Mr Manuel has energetically seized the opportunity provided by his two bosses’ support, revealing strong leadership and a highly articulate voice that has helped sell tough policies capable of sparking wide internal dissension but that showed foreign bankers that the African National Congress (ANC) government was capable of running the country.

Under the ANC, the country’s budget deficit as a share of GDP has fallen from about 6% at the end of apartheid rule to a forecast of 2.3% in the 2004/2005 fiscal year. And improved sustainability of the country’s debt has allowed the government to widen the deficit modestly, to be spent on capital projects, without censure from the markets.

With the finance minister’s annual budget speech now a predictable affair (his medium-term budget planning has established unprecedented levels of predictability), he is now more keenly watched on the issue of exchange controls and his final approval of the takeover bid of South Africa’s ABSA by Barclays.

While left-leaning elements in the ANC and the party’s allies in the unions have hammered the policy of fiscal restraint, Mr Manuel, who is closely identified with these polices, ironically remains one of the most popular leaders in the party.

Mr Manuel, who holds an engineering diploma, has no formal training in economics yet enjoys huge credibility within party ranks. He spent most of the 1980s in the leadership of the United Democratic Front, the broad anti-apartheid coalition, and was jailed for a total of 35 months as a result. In 1991 he was elected onto the ANC’s top policy committee and then headed its economic planning department. After the 1994 election he was made minister of trade and industry and drove the country’s trade liberalisation. Two years later he became finance minister.

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