Chal­lenge to the Re­serve Bank is ques­tioned

The Star Early Edition - - BUSINESS REPORT - Tiisetso Mot­soe­neng

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.

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