Black business wants Bank to tackle jobs
BLACK business leaders want the Reserve Bank’s mandate to be widened so that it can also focus on employment.
“Most developing countries in the world have used a multiplicity of instruments to drive a certain behaviour in the economy, and to a certain extent we are not seeing ourselves as outliers in terms of general thinking,” Black Business Council deputy president Sandile Zungu said on the sidelines of the council’s annual conference. “But first and foremost our mandate is about transforming the economy so that there is greater participation by black people in the economy.”
Zungu’s call is likely to resonate with the ANC’s allies in the tripartite alliance, which have also called for an expansion of the Reserve Bank’s mandate.
Founder of the Centre for Economic Development and Transformation Duma Gqubule told the conference that the Bank had contributed to SA’s slow economic growth. He said the Bank should be “implicated” in causing the past three recessions.
“Our downturn in the economy preceded the global financial crisis.
“The problem we have in SA right now is that we’ve had low growth of 1.6% for eight years … we can’t still be talking about the global financial crisis,” Gqubule said.
He also questioned the credibility of ratings agencies. “I looked at the credit note on SA … I was shocked. It’s a five-page document … it is such childish and infantile analysis and I don’t think we should be listening to them,” Gqubule said.
Moody’s Investors Service is keeping a close eye on political divisions ahead of a planned update of its rating on November 25. In May, Moody’s confirmed SA’s rating but put it on negative outlook, implying a probability of a downgrade of about one-third.
Council CEO Mohale Ralebitso said the council wanted SA to “enjoy good ratings”.
“They are not infallible by any measure but it does not mean that their inputs are not useful in terms of helping us out beyond what their particular ratings are.”
Ratings agencies helped assess the country’s level of financial fitness and its ability at a systemic level to get the balance right between what it collected and what it spent, and any factors that influenced the sovereign credit rating, he said.
“But they don’t have hegemony of what is good and wrong in particular to governing a country.”
Zungu said the Black Business Council had been at the centre of persuading ratings agencies to avert a downgrade.
“As an organisation we recognise the importance of these ratings agencies and it’s quite important that we pull in the same direction as everyone else in the country to not necessarily throw stones at the ratings agencies,” he said.