The finance minister yesterday felt the need to speak up, partly over possible fears of an imminent recession.
The opposing factions within the governing ANC are ready to square up once more – this time over the implementation of radical or moderate economic policies – and the battleground is the SA Reserve Bank (Sarb).
It remains to be seen who will win this tug-of-war between the advocates of the unpopular radical economic transformation (RET) and the moderates who favour a market-driven economy.
The next few weeks are set to be fractious in the run-up to President Cyril Ramaphosa’s State of the Nation Address (Sona) and the tabling of the budget by Finance Minister Tito Mboweni.
RET advocates insist on changing the Sarb mandate to include economic growth and employment, something the moderates reject as “rubbish”.
This week, ANC secretary-general Ace Magashule, who has become the face of RET, said the ANC lekgotla, a gathering of party and government officials, agreed “to expand the mandate of the South African Reserve Bank beyond price stability to include growth and employment”.
His statement sparked angry reaction from the markets and an unambiguous statement from Mboweni that this was not going to happen.
Mboweni is a no-nonsense and outspoken pro-markets politician. Now, the gloves are off and the stage set for a bruising duel towards Sona and beyond.
Senior members in the camp of Ramaphosa pooh-poohed any suggestion that the bank’s mandate must be altered or expanded.
They claimed Magashule sent his own personal message and it was contradictory to the actual discussion point within the party.
Two senior ANC members, who preferred to remain anonymous, vowed that Ramaphosa would not present any policy that changed the mandate of the Reserve Bank. The status quo would prevail.
Mboweni has rejected the call to include growth and employment as part of the bank’s function. One ANC NEC member highlighted that Magashule’s statement was against the spirit of the ANC Bulletin.
“Our Bulletin doesn’t say anything about what Ace and Pule [Mabe] were saying,” he said.
Another member said it was all a clash about policy direction between the RET groups and those who believed the markets’ sentiments must be considered.
“When they got defeated at Nasrec, they were pushing for radical policies and opposed the market-driven approach.
“But Ramaphosa cannot pronounce on radical policies because the ANC was voted in by 11 million people, of which only 1 million are ANC members.”
He said Mboweni was worried that external pronouncements on the Sarb would push the country into a recession and scare away investors. The Citizen