SA needs clarity on Reserve Bank policy fiasco
It remains a mystery how these issues will be actualised without tinkering with bank’s mandate
Policy certainty is a prerequisite for any economy to thrive. On May 8, millions of South Africans took their time to vote and gave the ANC a mandate to drive the economy to prosperity through clear policies.
But on Tuesday, instead of policy certainty, South Africans were bombarded with policy confusion. Announcing the outcomes of the ruling party’s weekend lekgotla, ANC secretarygeneral Ace Magashule told journalists that the NEC had taken a decision to expand the mandate of the SA Reserve Bank to go beyond price stability and include growth and employment.
A few hours later, finance minister Tito Mboweni took to social media and contradicted what Magashule had said. ANC economic transformation head Enoch Godongwana joined the fray. He indicated that Magashule’s statement was “inaccurate” as only the finance minister and Reserve Bank governor would “continue to assess our economic performance and co-ordinate macroeconomic policy in the interest of balance and sustainable economic growth”.
So who do we believe? Did the ANC sell the electorate a dummy ahead of polls?
This is the same ANC that resolved at its elective conference in December 2017 that the Reserve Bank should be nationalised. In its election manifesto ahead of the May polls, the ruling party says monetary policy has to take employment and economic growth into account. It remains a mystery as to how these issues will be actualised without tinkering with the mandate of the bank.
The pronouncements without concrete steps leave room for multiple interpretations.
The Reserve Bank debate confusion happened on the same day that StatsSA released data indicating a shock 3.2% contraction in SA’s GDP in the first quarter of 2019. The rand tumbled by 2% to reach R14.74/$ on Tuesday as confusion reigned.
Speaking in parallels can only make these problems worse.
We implore the ANC to put its house straight and speak with one voice. Its leadership cannot afford to debate issues through social media and reckless public statements. Now is the time for President Cyril Ramaphosa to step forward and take the nation into his confidence on government policy on the Reserve Bank.