INVESTMENT
Outdated exchange controls are crippling SA’s growth potential
Forex controls cause foreign and local investors to think twice about investing in SA, writes Jasson Urbach
Every day, SA’s foreign exchange (forex) controls destroy more economic growth, job creation and transformation. Every day they increase poverty and exacerbate inequality. With the unexpected strength in the rand, there will seldom be a better time to abolish them. In a state of the nation address on February 9 1996, then president Nelson Mandela said: "For us, it is not a matter of whether, but of when, these controls will be phased out." This followed then finance minister Trevor Manuel announcing a five-year "phasing-out process" in 1995 because, as he said, "the rand is not under our control …". Former Reserve Bank governor Tito Mboweni then acknowledged in 2005 that the time had come for exchange controls to be entirely dismantled. "For all intents and purposes," he said, "exchange controls have become purposeless … the cost of exchange control administration and the inconvenience that goes with managing [it] are not worth the exercise." Forex controls cause foreign and local i...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.