Challenge to the Reserve Bank is questioned

PARLIAMENT is planning to challenge in court an anti-graft watchdog’s recommendation of constitutional changes to the mandate of the central bank, it said on Friday, highlighting worsening divisions between state institutions.

Divisions have also surfaced within the ruling ANC since President Jacob Zuma sacked his finance minister in March and are likely to keep emerging until the party elects a new leader in December.

The central bank and Barclays Africa have also asked for a court review of Public Protector Busi Mkhwebane’s proposal to change the bank’s primary mandate of maintaining currency and price stability to focus instead on growth.

“Parliament believes that the remedial action (recommendation), which is binding in terms of the law, usurps the powers of the institution under the Constitution,” it said on its website.

Mkhwebane made her proposal at a Pretoria news conference last Monday where she delivered her findings on an apartheid-era bailout by Barclays Africa.

The bank has denied any wrongdoing.

Her call threatens to further stain South Africa’s image as an investor-friendly emerging market, coming less than a week after mines minister Mosebenzi Zwane spooked investors by raising the minimum threshold for black ownership of mining companies to 30 percent from 26 percent.

The row over the South African Reserve Bank has also highlighted divisions in the tripartite political alliance of the ruling ANC, the country’s biggest union, Cosatu, and the SACP.

Both the ANC and the SACP are opposed to constitutional changes aimed at altering the role of the central bank, while Cosatu has backed calls for amendments.

Deputy President Cyril Ramaphosa said at a fundraising dinner for the SACP on Friday that suggestions that the constitutional mandate of institutions such as the Reserve Bank should be changed must be viewed with concern.

“They need to be approached with a comprehensive understanding of the contribution that such institutions make to the stability of our economy, and, hence, the contribution that such institutions make to our ability to fulfil our mandate for fundamental transformation,” he said. – Reuters

PHOTO: REUTERS The central bank and Barclays Africa have asked Public Protector Busisiwe Mkhwebane’s proposal to change the Reserve Bank’s primary mandate to be reviewed by the courts.