Lukanyo Mnyanda Editor: Business Day
Finance Minister Tito Mboweni. Picture: ESA ALEXANDER
Finance Minister Tito Mboweni. Picture: ESA ALEXANDER

In a thinly veiled rebuke of ANC secretary-general Ace Magashule, finance minister Tito Mboweni said it was painful to see people undermining the efforts made so far to stabilise the country’s finances.

Speaking at the launch of commemorative coins by the SA Reserve Bank at the Constitutional Court, Mboweni outlined steps taken at the end of apartheid to stabilise finances and gain market credibility.

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“To see people undermining it with reckless statements is very painful,” Mboweni, who previously served two terms as Bank governor, said.

His phone was ringing off the hook with international journalists seeking answers.

“Nobody is talking about changing the mandate. It’s clearly stated in the constitution,” he said. “I don’t understand the obsession with the Reserve Bank and saying things that we know are going to destabilise markets.”

The issue of the Reserve Bank has become a proxy war between the ANC's Ramaphosa camp and the Zuma fight-back faction. This is also the second time that officials at Luthuli House have been taken to task for misleading public statements about the status of the central bank.

Mboweni's comments come a day after Magashule said the ANC lekgotla had decided that it would expand the mandate of the Reserve Bank and explore the use of quantitative easing to deal with government debt.

Speaking to reporters at the same event, Reserve Bank governor Lesetja Kganyago said conditions for the so-called quantitative easing policy, under which governments inject money into an ailing economy by buying assets such sovereign bonds, did not exist. 

Kganyago, whose five-year term runs out in November, said he  would be available to serve the country. 

“What you can’t do is beat an economy that’s on its knees” and think that will produce jobs, Kganyago said. “Jobs are an outcome of economic growth.

The ANC's announcement was a bombshell after the news that the economy had had its biggest contraction since the depths of the global financial crisis in 2009.

A few hours after Magashule's announcement, the ANC's economic transformation subcommittee head, Enoch Godongwana, had to walk back Magashule's comments, saying that considering quantitative easing was not on the ANC's agenda and that there was no decision to expand the mandate of the central bank.

mnyandal@businesslive.co.za