The Reserve Bank in Pretoria. Picture: FINANCIAL MAIL
The Reserve Bank in Pretoria. Picture: FINANCIAL MAIL

The South African Chamber of Commerce and Industry (Sacci) says while the debate on the role of the central bank in driving economic growth should not send alarm bells in a democratic society the current discussion is misplaced.

On Tuesday, ANC secretary-general Ace Magashule sent shockwaves through SA when he announced that the party would expand the mandate of the Reserve Bank and explore the use of quantitative easing to deal with government debt.

However, the head of the ANC’s economic transformation committee, Enoch Godongwana, later issued a statement  contradicting Magashule’s assertions, in effect further underscoring the ANC’s policy incoherence on the matter and creating uncertainty.

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Godongwana said that consideration of quantitative easing was not on the ANC’s agenda and that there was no decision by the ANC to expand the mandate of the central bank.

EFF leader Julius Malema stole a march on the governing ANC in 2018 by proposing legislation to nationalise the Bank. The Bank is owned by private shareholders, although they have no power over how it operates, its monetary policy or who leads it.

“There should be a debate about anything and everything in a democratic country,” Alan Mukoki, the CEO of Sacci said on Wednesday.

“Where we disagree is tampering with the constitutional mandate of the Reserve Bank. The constitution is very clear about the independence of the Reserve Bank. In other words, politicians cannot tell the Bank what to do,” said Mukoki.

He said many institutions are likely to come under pressure as government battles to boost economic growth and create jobs.

“However, it’s very important to focus on the root cause of [low growth], but clearly the Reserve Bank cannot be the root cause”. 

The DA vowed to fight in parliament any proposed changes to the Bank’s independence and mandate.

Finance minister Tito Mboweni also weighed in on the issue on Wednesday, saying it was painful to see people undermining the efforts made so far to stabilise the country’s finances.

"Nobody is talking about changing the mandate of the Reserve Bank. This is clearly stipulated in the constitution. I don't understand why the obsession about the central bank all the time," Mboweni said. "Why say things that destabilise the market?"

Reserve Bank governor Lesetja Kganyago has insisted on the Bank’s  independence, arguing that nationalising the central bank would be too risky for the economy.

Credit ratings agencies have also warned SA not to tamper with the independence of the central bank, saying it could lead to ratings downgrades.

The DA maintains that the uncertainty around the future of the Bank will rattle investors, dealing a major blow to SA’s already ailing economy.

“We will oppose any changes to the Reserve Bank independence and mandate,” DA leader Mmusi Maimane said as he announced his shadow cabinet on Wednesday in parliament.

Maimane said the DA will ensure that parliament works for the people by continuing to hold every exercise of public power by the executive to account.

“Through motions, oral and written questions, and persistent work in parliamentary committees, we will not allow the ruling party to relegate parliament to a toothless lapdog of the executive,” said Maimane.

 “Our work will focus on an agenda for reform. The most pressing of these is the need for urgent economic reform. In this light, we will use parliament to table our Jobs Bill and Cheaper Energy Bill, focus on city-led economic growth, fight for labour legislation reform, oppose any changes to the Reserve Bank independence and mandate, propose alternatives to the current state-owned entity (SOE) ownership framework, propose alternatives to the current Mining Charter, and oppose threats to the economy and fiscus such as NHI [National Health Insurance] and expropriation of property and land without compensation,” the DA leader said.

His shadow cabinet is a mix of new, young legislators, and seasoned MPs such as Natasha Mazzone, who returns to the crucial public enterprises portfolio. Geordin Hill-Lewis will be the party’s spokesman on finance, while Kevin Mileham will speak on mineral resources and energy.

Annette Steyn will focus on agriculture, land reform and rural development, a portfolio which will be keenly watched amid the push for expropriation of land without compensation. The DA won 84 seats in the National Assembly, the second highest after the ruling ANC. However, the seats were five less than what the opposition party garnered in 2014.​