No Ace in the hole
Cyril Ramaphosa had to walk back the ANC secretary-general’s comments on the Reserve Bank last week – a move that simply gives the lie to the party’s façade of unity
After days of messy confusion, President Cyril Ramaphosa finally came out late last week to announce that the ANC will not push for the nationalisation of the SA Reserve Bank because it is "simply not prudent". The Bank’s mandate, as laid out in the constitution, will not change, he said.
Ramaphosa’s statement came two days after ANC secretary-general Ace Magashule announced that the party’s national executive committee (NEC) had decided at its weekend lekgotla that the Bank’s mandate would be expanded beyond price stability to include growth and employment.
He also said the NEC had directed the government to consider establishing a task team to explore quantitative easing as a means of addressing intergovernmental debts and making funds available for development.
Magashule’s comments did not go unchallenged: swift reaction followed from Enoch Godongwana, head of the ANC’s subcommittee on economic transformation, and finance minister Tito Mboweni.
As the debate played out on social media, the contradictions — and factional lines dividing the party — were brought into sharp focus.
Ekurhuleni mayor Mzwandile Masina — who once memorably claimed he would resign if Ramaphosa became ANC president — sided with Magashule; Mboweni and former tourism minister Derek Hanekom took up Godongwana’s line.
The spat necessitated a meeting of the ANC’s top six officials, after which Ramaphosa released the statement walking back Magashule’s comments. But shortly after that, a tweet went out from Magashule’s Twitter profile that reiterated what he’d said about the Bank. It was very quickly pulled, replaced by Ramaphosa’s statement and a tweet saying: "All ANC members who love tweeting and expressing themselves are to adhere to this line of march."
It is still not clear whether it was Magashule himself who sent out the offending first tweet, or someone in his office taking it upon themselves to belligerently contradict Ramaphosa.
Either way, it seems clear that there are two centres of power in the ANC — and that any pretence of unity has completely broken down.
This while the economy plunges and the rand plummets.
For political analyst Ralph Mathekga, it’s slightly more complicated.
He believes there are multiple centres of power in the party, based on policy divides.
"[This] requires that the president negotiate with multiple stakeholders, within the party, before he even talks to [outside] stakeholders when it comes to policy," he says.
For example, the debate on the Bank’s mandate began long before Ramaphosa became president, and was driven by the SACP and Cosatu — both of which supported Ramaphosa’s bid for the party presidency ahead of the 2017 elective conference.
It leaves Ramaphosa in a bind.
There is no way the ANC is going to yield its mandate to RamaphosaRalph Mathekga
"There is no way the ANC is going to yield its mandate to Ramaphosa because the private sector believes he is the right person, and NGOs and outside observers believe he is the right person," says Mathekga.
It was this that informed his carefully crafted statement — one designed to appease the different factions: the ANC would like to see the Bank nationalised, but it is not the right time to do so, and the country cannot afford to proceed with it at present.
However, political analyst Daniel Silke says Magashule’s comments so undermined Ramaphosa’s credibility that even this statement was insufficient to reassure investors and spark a recovery in the rand. There was simply not enough belief from investors and the global financial community in Ramaphosa’s reassurances.
"SA’s internal credibility has been severely undermined as a result of state capture and [this is] exacerbated by the emergence of two centres of power and the seeming ease with which Luthuli House, under Magashule, is able to express [itself] on economic policy," says Silke.
"You have this high level of mistrust … so any attack on the Reserve Bank … is greeted with extreme scepticism [by the markets]."
But Ramaphosa doesn’t just have party factions to contend with; Silke and Mathekga agree that the EFF presents a challenge of its own — one that will test the ANC too. The party has announced that it plans to table a motion in parliament to nationalise the Bank.
What it means
It remains to be seen if the ANC will support the EFF in parliament on the nationalising of the Reserve Bank
It could be something of a conundrum for the ANC. When the EFF took the lead and tabled a motion to amend the constitution to allow for expropriation without compensation, the ANC sided with the red berets.
If pushed into a similar position, will the ANC vote with Julius Malema’s party, or will it follow Ramaphosa’s more prudent line?
Silke believes this will be an important test for the ANC — one that shows whether the party can close ranks in parliament when it comes to touchy economic policy.
In March last year, the party withdrew a motion to nationalise the Bank before it could be debated in the National Assembly, ostensibly to allow for more consultation.
Over a year on, Mathekga says the debate on the Reserve Bank is not yet done — and Ramaphosa himself will not be able to bring it to an end. He likens the government to the biblical Tower of Babel: "people just lose touch [with] what [others are] saying", he says; it will simply break down.