‘This policy has not changed’ — Ramaphosa weighs in on ANC Reserve Bank fight

By Greg Nicolson 6 June 2019
Illustrative image. Photos: ANC secretary general Ace Magashule speaks to journalists outside the ANC’s national executive committee meeting in Cape Town, 23 March 2018. Photo by Leila Dougan / Background: Adobestock

The fault line between ANC factions has been exposed over the party’s plans for the Reserve Bank. On Thursday, President Cyril Ramaphosa joined the fray and contradicted secretary-general Ace Magashule’s claim the ANC had decided to expand the Bank’s mandate.

It’s rare to get a media statement from the office of the ANC president, but on Thursday Cyril Ramaphosa issued a press release from the “Officials of the African National Congress regarding urgent Economic Priorities facing South Africa”.

ANC leaders have been openly contradicting one another about their plans for the South African Reserve Bank since Secretary General Ace Magashule on Tuesday announced the ANC had decided to expand the bank’s mandate to include growth and employment and explore “quantity easing measures”.

Ramaphosa said the party’s top six leaders met at the ANC’s Luthuli House headquarters on Thursday after the national executive committee’s (NEC) lekgotla at the weekend and StatsSA’s announcement that GDP had contracted by 3.2% in the first quarter of 2019.

The Officials emphasised the policy positions of the ANC on the independence and role of the South African Reserve Bank as set out in the Constitution of the Republic of South Africa,” said the president.

He noted the constitutional provision that outlines the Reserve Bank’s role as “protecting ‘the value of the currency in the interest of balanced and sustainable economic growth’ ”.

This policy has not changed.”

Within the ANC and its alliance partners, the debate over the Reserve Bank’s mandate has a long history as a point of contention between the party’s different shades of socialists and capitalists. More recently, the ideological points of difference have become spaces of factional fissures between the Ramaphosa and Magashule camps.

The president’s emphasis on maintaining Reserve Bank’s current mandate is essentially a rebuke of Magashule’s position. Ramaphosa’s statement was a subtle, but symbolic rejoinder.

The secretary-general was adamant on Tuesday the party had agreed to change the Reserve Bank’s mandate. The party’s economic transformation head Enoch Godogwana and Finance Minister Tito Mboweni openly contradicted their secretary-general.

It is our desire for the South African Reserve Bank to be publicly owned. However, we recognise that this will come at a cost, which given our current economic and fiscal situation, is not simply prudent,” said Ramaphosa.

In the context of the above, the Officials viewed the recent public spats about the mandate of the SA Reserve Bank as not being helpful, and mitigating and undermining the confidence of citizens and investors.”

The rand fell after Magashule’s announcement and there’s no doubt investors would worry about attempts to interfere with the Reserve Bank’s mandate, but the target of Ramaphosa’s message appears clear — Magashule.

On his Twitter account on Thursday, the secretary-general responded to the president’s statement by reiterating the ANC’s decision to change the Reserve Bank’s mandate. That tweet was deleted and Magashule then tweeted, from the same account, about “a fake tweet doing the rounds”.

The Officials have met today and have agreed to the below statement. All ANC members who love tweeting and expressing themselves are to adhere to this line of march,” said Magashule.

Magashule had repeatedly retweeted mentions of the ANC’s resolution from its 2017 Nasrec conference.

That resolution reads:

On the South African Reserve Bank: Reaffirm the resolution of the 53rd National Conference Resolution on the mandate of the South African Reserve Bank which states: ‘South Africa requires a flexible monetary policy regime, aligned with the objectives of the second phase of transition. Without sacrificing price stability, monetary policy should also take account of other objectives such as employment creation and economic growth.’ ”

The ANC might want to clarify exactly what the vague resolution means. It’s being used by both Ramaphosa’s and Magashule’s factions to justify their attacks. Meanwhile, the economy suffers. DM


In other news...

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