African National Congress (ANC) secretary-general Ace Magashule said at a press briefing on Tuesday the party's national executive committee (NEC) had resolved to expand the mandate of the South African Reserve Bank to not only be set on price stability but also include growth and employment.
Magashule's stance was disputed by several party heavyweights, who reassured investors that Reserve Bank's mandate would not be expanded.
To discuss the party's position, Nickolaus Bauer on the Xolani Gwala Show chats to ANC economic transformation head Enoch Godongwana and Pan African Investment and Research Services chief executive officer Iraj Abedian.
We sat with this discussion for almost two years from 2015 until 2017 and the conference resolved that the independence of the reserve bank remains. We must always distinguish between ownership and the mandate.— Enoch Godongwana, Economic transformation head - ANC
Godongwana says the Reserve Bank mandate is in the Constitution of South Africa and it must perform its function independently without fear or favour.
Concerning ownership which is not referred to in the Constitution, even if the Reserve Bank were to be nationalised tomorrow, it would only apply to ownership without impacting on its performance.— Enoch Godongwana, Economic transformation head - ANC
Quantitative easing is an instrument that is at the Reserve Bank's disposal, and the bank can utilise it if economic conditions dictate so, he notes.
When probed as to why Magashule would say what he said, Godongwana had this to say:
The document I have which arises from the lekgotla summarises the recommendation for economic transformation and does not contain all that you are talking about. You should have asked Magashule where he gets what he is saying.— Enoch Godongwana, Economic transformation head - ANC
He adds that there are significant issues at stake as the policy stance contained in Magashule's document has severe implications for the economy.
If we don't refute it, it is going to be damaging to the economy.— Enoch Godongwana, Economic transformation head - ANC
Abedian says the internal battles in the ANC undermine South Africa's brand as an investment destination.
It's profoundly concerning and unfortunate that you have some individuals in such powerful positions with frightening low levels of economic literacy.— Iraj Abedian, CEO - Pan African Investment and Research Services
Magashule's stance is undermining the country's grades and its reputation as well as bluntly undermining President Cyril Ramaphosa's new dawn.— Iraj Abedian, CEO - Pan African Investment and Research Services
He says South Africa cannot have two centres of power as that continues economic growth.
Listen below to the full interview: