Deputy President Mabuza confirms ANC’s policy incoherence on Reserve Bank mandate

The Deputy President, David Mabuza, in a reply to a Democratic Alliance (DA) parliamentary question confirmed that the ANC government is planning on changing the South African Reserve Bank’s (SARB) mandate and to reduce its independence.

This once again underscores the ANC’s policy incoherence on the Reserve Bank.

Since the ANC declared in their 2019 election manifesto, their intention to change the Bank’s mandate, there has been several contradictions from the ANC on this matter. This is creating a great deal of policy uncertainty and adversely impacting investor confidence in South Africa.

In the lead up to the World Economic Forum and during their time in Davos, President Cyril Ramaphosa and Finance Minister Tito Mboweni tried to convince investors and stakeholders that the ANC does not want to change SARB’s mandate and that the Bank’s independence is “sacrosanct”. Yet at the same time, on home soil, their ANC comrades, Ace Magashule,  Enoch Godongwana and Deputy President Mabuza are contradicting this message.

The ANC’s internal factional battles are now posing a serious threat to the SARB’s independence. Changing the mandate of SARB will not only have devasting consequences but is possibly a trojan horse to capture the Bank, enabling large scale looting, which will result in greater job losses and possibly hyperinflation.

The DA has already written to Finance Minister Tito Mboweni, for clarification on the future, mandate and independence of the SARB, to no avail.

The SARB is considered internationally as one of the best in the world. This tinkering with the mandate of the bank is not only disastrous for investor confidence but will also deal the country a blow domestically. With 10 million unemployed South Africans, we cannot afford to allow the ANC’s policy uncertainty threaten more job losses and possibly hyperinflation.

The DA will fight to keep the SARB independent and to ensure that its constitutional mandate is not violated.

Issued by Alf Lees, DA Deputy Shadow Minister of Finance, 25 January 2019