AYABONGA CAWE: ANC’s ‘quantity easing’ faux pas shows the internal incoherence of alliance
When debates on monetary policy become a proxy for factional contestation, resolutions are read with little reference to policy-related institutional memory
Were it not for our economic malaise and the negative growth numbers that came out of Statistics SA the day before, the “quantity easing” part of the ANC’s post-lekgotla statement might have been dismissed as a typo. However, the debate, for all its faults and status as cannon fodder in the narrow factional stand-off within the party, has again placed this issue at the centre of the public conversation.
Even the governor of the Reserve Bank accepts that there is a tradeoff between higher interest rates and output. He said as much in a lecture in Stellenbosch in March: “Inflation has not really been sufficiently low to get our high long-term interest rates lower, and this creates an economic cost that weighs more heavily on job creation as time goes on”.