What a fork-tongued mess.
On the day that StatsSA announced that South Africa’s economy shrank by 3.2% in the first quarter of 2019, ANC 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 Nasrec conference affirmed that the Reserve Bank should be 100% owned by the state — nationalised. That resolution, however, did not deal with expanding the Reserve Bank’s mandate.
Tinkering with the 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 RET simply meant 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 (sic) 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 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.
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 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 Reserve Bank’s mandate and said that government determines the mandate of the Reserve Bank. Meanwhile, the ANC’s economic transformation head Enoch Godongwana said that no decision was made at the lekgotla to expand the Reserve Bank’s mandate and that Magashule’s comments on quantitative easing were “inaccurate”. Godongwana ended in a welcome and forthright manner, “the matter is therefore closed”.
The question is, who is to be believed? The Minister of Finance, the Reserve Bank or the ANC — but 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 Reserve Bank matter raises its head yet again as the Public Protector, too, again attempts to flex her rather weak legal muscles. It was after all the Public Protector, Busisiwe Mkhwebane, who raised the mandate of the 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 will ensure the amendment of s224 of the Constitution. That section deals with the role, function and independence of the Reserve Bank.
Going even further, Mkhwebane provided draft wording for the changing of s224. It presently 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 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 Reserve Bank is 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 (EFF) 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 an uncomfortable, but necessary questions about the Public Protector herself and her integrity. Since then she has pursued 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. In 2018 she hesitatingly agreed to investigate the #GuptaLeaks emails, but not without the caveat that her office lacks the resources and so will 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 is abundantly transparent, after all.
It is, therefore, time for President Ramaphosa to lead with the mandate given to him on 8 May 2019. There can be no more pussy-footing around those who seek to destroy an economy already in tatters. It creates uncertainty we can ill afford and which will stymie Ramaphosa’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 use 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. DM
"Nothing takes the taste out of peanut butter quite like unrequited love." ~ Charles M Schulz
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