'Ace Magashule is lying': ANC's Reserve Bank squabble intensifies

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The fight within the ANC over the expansion of the mandate of the SA Reserve Bank (Sarb) intensified on Wednesday, with Cosatu calling for the Constitution to be changed to allow it. The latest political squabbles among ANC leaders come after party secretary-general Ace Magashule announced on Tuesday that the governing party’s national executive committee’s lekgotla had resolved that the central bank’s mandate should be expanded beyond price stability to also include growth and employment. ANC head of economic transformation Enoch Godongwana, however, accused Magashule of misrepresenting the outcomes of the NEC lekgotla. “He is lying. None of what he said was resolved by the lekgotla on the Reserve Bank. I called him and he switched off his phone.” Godongwana said he had subsequently called ANC spokesperson Pule Mabe to express his concerns about Magashule’s utterances, which he said were reckless and risked worsening policy uncertainty in the country.

Mabe could not be reached for comment.

Cosatu, which also participated at the lekgotla, has however thrown its weight behind Magashule, calling on President Cyril Ramaphosa to rein in ANC leaders who opposed the expansion of the Sarb’s mandate, including Finance Minister Tito Mboweni who took to social media to lambaste Magashule.

Cosatu spokesperson Sizwe Pamla called on the president to announce a clear path to ensuring that the central bank mandate was adjusted to ensure it tackled unemployment and inflation, as well as the process of its nationalisation.

“The president must lead and not allow these political vandals to run amok while our economy is bleeding because his silence will simply mark a green light for the factions to play games with workers’ lives. People like Tito Mboweni are shareholders at the Reserve Bank and they are conflicted on this matter, so they are representing their interests,” Pamla said.

In 2017, the ANC’s national elective conference resolved to nationalise the Sarb, but there have been political differences within the ANC and its alliance on whether or not the bank’s mandate should be amended.

Mboweni accused Magashule of being obsessed with the Sarb.

“Let us leave the SA Reserve Bank alone to pursue its mandate without fear, favour or prejudice. Let us focus on micro-economic restructuring to grow the economy.

"Let us stop shouting at business and embrace them as partners in economic growth, investment and job creation,” Mboweni said.

The move to change the Sarb mandate has also been opposed by its governor Lesetja Kganyago, who has repeatedly emphasised that thel bank’s mandate was derived from the Constitution.

Pamla said the government should not hesitate to change the Constitution.

“We want to see efforts to change the source of the Sarb’s power to pursue inflation targeting.

"That source is Section 224 (1) of the Constitution which states that the primary object (mandate) of the SA Reserve Bank is to protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic,” Pamla said.

The federation accused Sarb of causing considerable damage to the economy under the guise of independence, including through scrapping critical legislation on capital flights out of South Africa.

“This led to a mass exodus of large corporations like Anglo-American, SA Breweries, Dimension Data and Old Mutual” Pamla said.

The SACP also threw its weight behind Magashule, calling on the ANC to follow through on its resolutions.

The Star