Xolile Guma: Senior Deputy Governor of the SA Reserve Bank

04 July 2010 - 02:36 By Chris Barron
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Cerebral analyst at the central bank has great faith in SA's prudent fiscal approach, writes Chris Barron. Modest, urbane, cerebral, Xolile Guma, who has been appointed senior deputy governor of the Reserve Bank, would grace any central bank in the world.

Not that he'd want to.

Go on, how about Greece, I ask? Impeccably polite, he confines himself to a restrained chuckle. "Let me not comment on that."

The meltdown in Greece contains two lessons for South Africa, he says.

"One is that fiscal policy does matter. If you don't rein yourselves in you can expect a crisis to occur at some point in the future.

"Secondly, it says something about the benefits of a flexible exchange rate. Those who chose to go into a fixed exchange rate within the euro area effectively gave up one policy instrument.

"And if you don't have that option then obviously the process of adjustment to imbalances in the macro economy must fall disproportionately elsewhere."

That's something those punting monetary union in Africa might consider most carefully, he suggests.

As big as the temptation "will always be" on governments including our own to spend what they don't have, Guma does not believe something similar would have been allowed to happen in South Africa.

"The pressure will always be there, but I think we have authorities in national Treasury and elsewhere in the system who are fully cognisant of the dangers that would follow were they to give in to that kind of pressure."

Guma says minister of finance Pravin Gordhan's celebrated note to governor Gill Marcus earlier this year about growth and development being part of the central bank's mandate changed nothing.

"That has always been something that the Reserve Bank considers, but the overriding concern must be the constitutional imperative (to keep inflation in check) and that hasn't changed."

What about above-inflation wage increases, most recently at Transnet?

"If wage increases continually outstrip increases in productivity then there will be a problem going forward," he warns gently.

Does he share the general optimism about the long-term benefits of the World Cup for South Africa?

Beyond agreeing that it has inspired "social cohesion", he is reluctant to commit himself. "The sums haven't been done yet in terms of a financial cost benefit analysis."

Guma, 53, who has a doctorate in economics from Manchester University, joined the Reserve Bank in 1995 as an economist in the research department.

He became deputy governor in 2001 and the reluctant subject of speculation that he was being groomed as Tito Mboweni's heir apparent.

Instead he found himself made "special advisor" to the governor when then-president Thabo Mbeki controversially failed to renew his contract as deputy governor.

Similar speculation this time round has "no merit", he says.

"Anything will reawaken that kind of speculation among those who occupy themselves in this way but I don't think my appointment has any bearing on that (the likelihood of succeeding Marcus) at all.

"After all, the governor's only been in office for less than a year."

Those who know him don't think he'd be particularly good, or happy, as governor, anyway.

He is a back-room specialist, a "technocrat", they point out.

Guma, an academic at heart, is a reserved and private person who, away from his books and papers, is happiest when gardening and playing bowls.

He has made it quite clear that succeeding to "what some people would call 'the ultimate job'" has never been his ambition.

Everything about Guma, who dresses in immaculate pinstripe suits and talks in a low, measured voice, weighing every word carefully before releasing it, speaks of punctilious correctness. He says his peers at Waterford school in Swaziland, where Eastern Cape-born Guma did his A-levels in physics, chemistry and maths, "all thought that I was far too restrained".

He always wanted to be a scientist. "Then I discovered something called 'accounting'."

He majored in accounting and economics at the University of Swaziland where his father, the late professor Sam Guma, was the founding vice-chancellor.

None of the accounting firms (all the big names) would accept him for articles because he was black.

And so he became an economist. He did his master's degree at the University of Toronto in an astonishing nine months. He was newly married (to ex-wife Lindiwe Sisulu, now minister of defence) with a young daughter, he explains, and was anxious to return home as soon as possible.

He got his PhD at Manchester University and taught monetary economics at the University of Swaziland. Described by colleagues and friends as "very cerebral", Guma is a visiting professor at Rhodes University.

He loves lecturing but only has time for a few lectures a year and misses the academic life "very much indeed" - being able to debate issues freely, "and be criticised", without having to bite his tongue in case he says something controversial.

Meetings of the Reserve Bank's monetary policy committee to decide interest rates fill the gap in part.

"We have our own views and express them very robustly."

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