NATIONAL NEWS - The Democratic Alliance (DA) has said that President Cyril Ramaphosa’s “quiet diplomacy” on the South African Reserve Bank (SARB) is adding to the country’s economic crisis.
DA MP Geordin Hill said the “policy schizophrenia” of the governing African National Congress (ANC) on the SARB had cost the country’s economy dearly with the Rand losing almost 2% on Tuesday following the confusion within the party.
Senior ANC officials recently publicly shared contradictory statements about the SARB and the expansion of its mandate.
This week, ANC secretary-general Ace Magashule said the ANC lekgotla, a gathering of party and government officials, agreed “to expand the mandate of the South African Reserve Bank beyond price stability to include growth and employment”.
His statement sparked an angry reaction from the markets and an unambiguous statement from Finance Minister Tito Mboweni that this was not going to happen.
Mboweni’s sentiments were echoed by the ANC’s economic transformation head, Enoch Godongwana, who said a National Executive Committee Lekgotla was not a decision-making body.
Hill said Ramaphosa’s silence on the matter “is deafening”, calling for the president to publicly clarify the governing party and government’s position on the bank.
“The president should stop [Magashule] from ever speaking on the economy, and should publicly explain and clarify how the ANC’s [NEC] came to make the damaging statement that it did. This cannot be explained away as an innocent miscommunication,” Hill said.
Hill added that both Mboweni and SARB Governor Lesetja Kganyago have come out in defence of the SARB’s mandate and ruled out “quantity easing” after Magashule announced on Tuesday that the NEC had decided to change the mandate of the SARB and that quantitative easing would be considered. However, investors are still not convinced.
“President Ramaphosa has not consistently protected the mandate and independence of the SARB, and has yet to quell the uncertainty created by the contradictory statements given by the ANC and ministers,” said Hill.
“The South African economy is performing very poorly, having contracted by 3.2% in the first quarter of 2019.
“South Africa cannot afford the kind of reckless utterances coming from the ruling party as the consequent policy uncertainty will continue to compromise investment, economic growth, and job creation.
“The independence and current mandate of the SARB must remain intact. The DA will use all mechanisms at our disposal to strongly oppose any attempts to change the SARB’s mandate or compromise its independence.”