President must decide soon on deputy governor
President Cyril Ramaphosa is procrastinating yet again, this time on an appointment key to investor perceptions of SA and its economic fortunes. In July 2023, Reserve Bank deputy governor Kuben Naidoo first conveyed to Ramaphosa his intention to leave the Bank sooner rather than later, and well before his contract ended in March 2025. There was evidently nothing sinister in the resignation: Naidoo was in his second fiveyear term at the Bank and was in the public sector for more than two decades, serving with distinction in the Treasury and the presidency. It was beyond the president’s power to stop him.
Naidoo’s request to go should have provided the opportunity to make a strong new appointment, well before the election turmoil. But Ramaphosa frittered away the opportunity, as sadly is his habit. He has yet to accept Naidoo’s resignation formally or to give any indication that he is planning to announce a replacement any time soon. Naidoo has left the building and gone on the required six months of “garden” leave nonetheless, after the Bank’s board decided it wouldn’t be fair or correct to delay this.
The manner of his departure spooked many in the market, and no wonder. The president’s procrastination, on something as simple as saying yes to a resignation is a bad sign. Terms of office of the other two deputy governors end in August. Governor Lesetja Kganyago’s second term ends in November. There is no limit on how many terms they can serve. But their reappointment or replacement is entirely the president’s prerogative. Ramaphosa has not only to get his act together one of these days to decide on Naidoo’s replacement; he has to decide what to do about all three other leadership positions this year.
Such uncertainty about the Bank’s leadership cannot possibly be good for SA, especially in an election year when Ramaphosa could come under all sorts of political pressure.
As Kganyago said at last week’s monetary policy committee briefing, these are high-level executive posts. The governor and his deputies don’t just spend their time mulling over whether to hike, hold or cut interest rates, important as that is. They run the Bank, a large organisation with responsibilities including supervising SA’s banks and its financial system and overseeing its payments system, financial markets and financial stability, not to mention its role as banker to the government — and implementer of SA’s monetary policy.
Their competence and credibility are crucial for SA’s inflation and interest rates and also its financial stability and the soundness of its financial system. The Bank and its leaders have a reputation globally for astute management of monetary policy and SA’s financial system. When investors and ratings agencies talk of institutional strengths shoring up SA’s ratings and attractiveness despite its low growth, poor public finances and endemic corruption, the Bank is up there as one of those strong institutions.
Ramaphosa needs to act swiftly to make a sound and sensible decision on replacing Naidoo. He needs to start thinking about how to address any question marks about the rest of the Bank’s leadership, now and in future. Enough with the procrastination.