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Change the world

02/01/2021

The line between what you study at university and the career you ultimately pursue has become increasingly blurred, says the Governor of the South African Reserve Bank, Lesetja Kganyago, who was conferred an Honorary Doctorate of Commerce by Nelson Mandela University, during its online Business and Economic Sciences Graduation Ceremony on Thursday 17 December.

Speaking to the graduates, Kganyago explains that many business and economic sciences graduates enter other fields, such as government: “It’s essential for commerce graduates to understand how government works because it directly impacts on how business operates. In the same vein, many public policy and administration graduates go into business. But regardless of whether you go into government, your own business, an NGO or a position in the private sector, what you will be doing is applying your ability to master a body of knowledge, because this is what getting a degree is all about.

“Once you have demonstrated your ability to do this,” he adds, “you can choose a range of career fields. An important part of this is the capacity to adapt because the world of work is changing so fast and existing jobs are disappearing and being replaced with entirely new ways of working, as we are already experiencing.”

Kganyago, whose name is on all our bank notes, has served as South African Reserve Bank (SARB) Governor since 2014 and as Deputy Governor since 2011. He has received many honours and awards, locally and internationally, but what makes this honorary doctorate special, he explains, “is that it is from a university carrying the name of the founding father of our democracy”. What makes it “further special”, he adds, “is it is from a university that gives women hope and determination because at Nelson Mandela University, the Chancellor, Vice-Chancellor and Chair Of Council are all women who excel. They are an inspiration to every woman student and girl learner.”

Growing up with brothers, he says he always wished he had a sister “and so I adopt friends as sisters and have more female friends than male. I was also raised by two very strong women who were not pushed over by any men and they socialised us in a manner that we grew up respecting women.”

At the age of 18 he moved from Polokwane in Limpopo to Johannesburg and enrolled at Wits. He says that when he was a student, “one thing that never crossed my mind is that I would one day work for the SA Reserve Bank, let alone that I would be the Governor. When I went to Wits to pursue my undergraduate degree, I thought I would study medicine. At school, I had studied maths and science and biology, not commerce. But when Wits accepted me for commerce I decided to do this for the meantime and figure things out from there.”

As is the case with many students, he didn’t know exactly who or what he wanted to be, but his first year of economics offered a glimpse of things to come. He recounts that a certain professor said to him:  “You are clearly doing economics because you feel you have to do it, but based on the questions you are asking you actually have the ability to master it”.  He  wasn’t convinced and, like many students, he wondered if he shouldn’t change degrees.

“In my second year at Wits, I was so impressed by the law and arts students as they were the most articulate speakers at the anti-apartheid protest meetings, and I thought ‘that’s how I would like to be’. But a comrade of mine convinced me otherwise. He said: ‘No, you must not switch, mark my words one day we are going to run this country and we will need people with your skills’.

Kganyago explains it was a difficult time on campus as there were running battles with the police and constant harassment from the security police. In 1987 he decided to leave university and start working. He joined Barclays Bank in Polokwane as a savings and enquiries clerk, and the following year he registered with Unisa and completed his undergraduate commerce degree, with a view to becoming a chartered accountant. After Barclays he went to Cosatu as the head office accountant, followed by his appointment in 1991 as the African National Congress’s regional accountant in the former Northern Transvaal (now Limpopo), later becoming a national co-ordinator in the ANC’s economics department.

During this period he attended a course run by the University of London at the University of Botswana in Gaborone and they recommended that he enrol for a Master of Science in Development Economics at the School of African and Oriental Studies at the University of London, which he did in 1993. “London was a serious challenge,” he explains. “I was living away from South Africa for the first time, in a foreign city and foreign country and meeting people from many different countries and educational backgrounds. I had to figure out how to hold my own.”

By this time, his economics path was firmly on track, encouraged by people like Trevor Manuel who served as Minister of Finance from 1996 to 2009. “He said to me that it was a battle to find economists who understand the challenges South Africa faces and the history of the struggle; he encouraged me to pursue this path. I was aware of the key economic questions that needed to be answered and the failures of economic policy in other parts of the world and so I studied external debt in London and how a future democratic SA should approach this.”

Back in South Africa in 1994 he joined the SARB for two years, followed by National Treasury in 1996, rising to Director General. He remained here until he re-joined the SARB in 2011.

The democratic government inherited a mountain of national debt. It was just shy of 60%, and through a concerted effort of macroeconomic policies, prudent debt management policies and financial market development policies, by the time he left National Treasury in 2011, the debt had been reduced to around 30%, which meant there was more money for social spend, development and infrastructure.

National Treasury is responsible for fiscal policy and has to deal with the current national debt, while Kganyago’s job as SARB Governor is to protect the value of the rand in the interests of balanced and sustainable economic growth. He offers the following anecdote to explain this:

“When I go to my home village in Moletjie Ga-Maribana, Limpopo, people say to me, ‘you sign the money, can you please give us some’. I explain the money is not mine to give; it is something issued by this institution called the Reserve Bank which helps to ensure that when you take your rands to the shop the merchant will accept them because they have value.

“I explained that when I was a youngster, a loaf of bread cost 10c and when I asked a group of school kids in the village why it doesn’t cost this anymore, they replied it is because things have got more expensive. Which is true, but I then explained that things have got more expensive because of this thing called inflation and the problem with inflation is that if the money you earn doesn’t increase with inflation then your money will buy less.

“They asked what we can do about this and I explained that this is our job at the Reserve Bank. We can’t stop inflation and make it zero but we can keep it in a particular range of 3 to 6% which gives some level of comfort and predictability that the money in your pocket or wallet or handbag is able to buy roughly the same basket of goods that it was able to buy yesterday.”

Looking back at 2020, Kganyago and his team has had a hard year responding to the Covid-19 pandemic. “The virus has made a poor economic situation worse but I am an eternal optimist,” he says. “We are a country that has overcome great adversity before. The enemy we face today in the name of the coronavirus can be defeated if we all wear masks and observe the protocols. The ability to do this is in each one of our hands.”

To prepare for 2021 he’ll be taking a break in the mountains. “I like to wake up early and go for a hike in the mountains. While I’m walking I get a lot of ideas and at the end of the hike I jot them down in a little notebook. I reflect on them after the break and select the ones of value to share with my colleagues.” What he won’t divulge is his mountain destination, other than that it is in South Africa. He just smiles and says: “It’s a very long mountain range and I’ll be somewhere there.”

Contact information
Ms Zandile Mbabela
Media Manager
Tel: 0415042777
Zandile.Mbabela@mandela.ac.za