ANC And SA Reserve Bank Obsession

This article is credited to Judith February. Judith February is based at the Institute
for Security Studies, and is also a Visiting Fellow at the Wits School of Governance. The article was published on the website of
BANK. On the same day that Statistics South Africa
announced that South Africa’s economy shrank by 3.2% in the first quarter of this year,
the ANC’s Secretary-General, Ace Magashule, told the media that the NEC had decided at
its recent Lekgotla, that the mandate of the South African Reserve Bank should be broadened. Part of the context is that in 2017, a resolution
taken at the ANC’s conference in Nasrec, affirmed that the South African Reserve Bank
should be 100% owned by the state, i.e. nationalised. That resolution, however, did not deal with
expanding the bank’s mandate. Tinkering with the South African Reserve Bank,
has for a long while been the worn-out mantra of those within the ANC, who also championed
‘radical economic transformation’. What we know now is that Radical Economic
Transformation simply meant, a radical looting of the state that we are all paying for, and
will continue to pay for in perpetuity, it seems. In his comment to the media, Magashule spoke
of exploring “quantity easing to address inter-governmental debts”. ‘Quantity easing?’ or did he mean ‘quantitative
easing’, and how would that provide economic solutions to inter-governmental debt? It is for this reason, that South African
Reserve Bank governor, Lesetja Kganyago, has fiercely defended the mandate and independence
of the bank. He probably knows, that what the ANC charlatans,
including Magashule, touch will turn to ruin very fast. Magashule’s further comment, that unemployment
is a ‘national emergency’, and that it will be reduced by 13% in five years is gobbledygook,
spoken by someone who should not occupy the position he does, let alone speak on the economy
about which he understands precious little, or probably nothing. Magashule is right, that the economic situation
is an emergency, yet the ‘cure’ seems to be elusive, and there can be no quick fixes
to deal with unemployment, and in a stagnant economy. And so, when the situation is dire, then as
citizens, we can reasonably expect our government to lead, and not make matters worse. As soon as Magashule had spoken, Minister
of Finance, Tito Mboweni, took to social media to explain the South African Reserve Bank’s
mandate, and said that government determines the mandate of the bank. Meanwhile, the ANC’s economic transformation
head, Enoch Godongwana, said that no decision was made at the Lekgotla, to expand the South
African Reserve Bank’s mandate, and that Magashule’s comments on quantitative easing,
were ‘inaccurate’. Godongwana ended in a welcome and forth-right
manner: “the matter is therefore closed”. The question is, who is to be believed? The Minister of Finance, the South African
Reserve Bank, or the ANC? And if the ANC, then which part of the ANC
– Godongwana’s or Magashule’s? And herein lies the rub. The ANC cannot speak with one voice, because
its Secretary-General, and the faction he represents, are actively trying to undermine
President Cyril Ramaphosa. They may deny it, but it is clear as daylight. All of the confusion should be seen through
this lens. Magashule is not an honest broker, or messenger,
and we should not treat him as such. Context is everything in politics, and it
is curious, that the South African Reserve Bank matter raises its head yet again, as
the Public Protector attempts to flex her rather weak legal muscles again. It was, after all, the Public Protector, Busisiwe
Mkhwebane, who raised the mandate of the South African Reserve Bank back in 2017. Then, in a bizarre twist arising out of her
recommendations for remedial action in the Absa ‘lifeboat’ matter, Mkwhebane recommended
that Parliament, via its justice committee, ‘must’ initiate a process that would ensure
the amendment of s224 of the Constitution. That section deals with the role, function,
and independence of the South African Reserve Bank. Going even further, Mkhwebane provided draft
wording for the changing of s224. It currently reads: The primary object of the South African Reserve
Bank, is to protect the value of the currency, in the interest of balanced and sustainable
economic growth in the Republic. The Public Protector’s mealy-mouthed wording
would read: The primary object of the South African Reserve
Bank, is to promote balanced and sustainable economic growth, while ensuring, that the
socio-economic well-being of the citizens are protected. Deleted, therefore, is the mandate of the
bank to protect the value of the currency. The argument about the powers of the South
African Reserve Bank is a not a new one. Cosatu has always argued, that the bank’s
role ought to be revisited. In fact, in 2016, both Cosatu and the Economic
Freedom Fighters called for the ‘nationalisation’ of the Reserve Bank. This remedial action was strange, to say the
least, as was Mkhwebane’s belief, that it was even within her power to suggest such
economic tinkering. It raised uncomfortable, but necessary questions
about the Public Protector herself, and her integrity. Since then, she has pursued the Minister of
Public Enterprises, Pravin Gordhan, with a single-minded determination, while ignoring
investigations of import. If one were to be charitable, one could say,
that she does not have a full grasp of the law, or the powers of her office. Alternatively, one might say, that Mkhwebane
has become a political player herself. This past week, she took to YouTube, to defend
her actions against Gordhan, all of which appear spurious. Mkhwebane had also been sitting on reports,
regarding the relationship between the ANC and the Guptas. Last year she hesitatingly agreed to investigate
the hash tag Guptaleaks emails, but not without the caveat, that her office lacked the resources,
and so would probably not be able to do a complete job. Well, that did not stop her predecessor, Thuli
Madonsela. How we miss Madonsela’s integrity and her
unflinching ability to speak truth to power. And so in a time of economic uncertainty,
and ANC-inflicted turmoil, we would do well to join the dots between the likes of Magashule
and Mkhwebane, and the other ‘radical economic transformers’. Their modus operandi is abundantly transparent,
after all. It is therefore time for President Ramaphosa
to lead with the mandate given to him on 8 May. There can be no more stealth or furtive around
those, who seek to destroy an economy already in tatters. It creates uncertainty we can ill-afford,
and which will stymie Rampahosa’s efforts to attract investment. He has to throw down the gauntlet to his political
rivals, and claim the victory that he won in the election. That will mean, inter alia, creating broad
alliances across society, including business, civil society and labour, and squeezing out
those in the Magashule faction as far as he is able to. Now is not the time for cowering silence. It is also not the time for government ministers
to make their positions known on social media. A capable state has spokespersons through
whom it speaks clearly to citizens. Mboweni would do well to utilise those channels. Projecting stability and control, is what
is needed now, not the added confusion of ‘likes’ and retweets. Social media is not a platform for proper
communication on such important matters. And so as the president prepares for his State
of the Nation Address on 20 June 2019, he will hopefully provide us with the clarity
we need, to answer the question, “who runs this place?” Ramaphosa cannot afford to equivocate or falter,
since that speech will set the tone for the next five years, which will be complex, to
say the least. Judith February is based at the Institute
for Security Studies, and is also a Visiting Fellow at the Wits School of Governance. Please check in the description box below,
for the links to the sources of this report. Thanks for watching. Please comment, like, share and subscribe.