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EDINBURGH — There are some signs of rifts developing between President Jacob Zuma and his clique, on the one hand, and others who are tiring of the state capture narrative that is hammering the economy and creating social tension. This is evident amid the sea of protest swirling around the Public Protector, Busisiwe Mkhwebane, over her recommendation to change the Constitution to allow for more political control over the central bank. The ANC has slammed Mkhwebane’s proposal. Even Minister Malusi Gigaba, who is evidently ‘caught’ and ‘captured’ by Zuma, the Guptas and friends, has publicly distanced himself from the recommendation that would cater for altering the SA Reserve Bank mandate. Nevertheless, Gigaba failed to salvage his reputation as an economic imbecile. His appearance on Bloomberg TV is being described in some circles as a “car crash” interview – and among the reasons the rand has taken a knock. – Jackie Cameron
Bloomberg – South Africa should protect the independence of the Reserve Bank and must evaluate what effect the recommendations of the graft ombudsman to alter its mandate will have on the institution, Finance Minister Malusi Gigaba said.
“I respect the right of the Public Protector to make whatever determination but I also support fully the independence of the South African Reserve Bank,” Gigaba said in a Bloomberg Television interview in London. “We must not take any measures that are going to undermine that independence and so whatever decision we arrive at must not undermine the independence of the South African Reserve Bank.”
Public Protector Busisiwe Mkhwebane’s suggestions to alter the role of the central bank to focus less on inflation and more on societal needs has raised fears about eroding the independence of the institution, with the African National Congress and business groups accusing her of overstepping her powers.
The ruling African National Congress said the recommendations are unlawful. The Public Protector’s suggestions were part of report following an investigation into a Reserve Bank bailout for Bankorp, a unit of Barclays Africa, almost three decades ago.
“To change the constitution would not be unlawful, but the manner in which the recommendation is being made would be unlawful,” Gigaba said. The context and purpose of the proposed “amendment is not quite clear to me given the issues that were being investigated.”
Gigaba said he still needs to study the recommendations before deciding whether he will support the central bank’s fight against the move.
Mkhwebane recommended in a report on Monday that parliament start a process to change the constitution to make the central bank focus on the “socioeconomic well-being of the citizens” rather than protecting the value of the currency to contain inflation.
The Reserve Bank has said it plans to approach the nation’s courts to review Mkhwebane’s directive and set it aside as it falls outside her powers.
— Jonathan Witt (@Jonathan_Witt) June 20, 2017
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