Editor’s Note: June 06, 2019
South Africa doesn’t need any more confusion on the economy
“Why are we saying things we know are going to destabilise markets?” This was South African finance minister Tito Mboweni on Wednesday, following a public spat about the future of the country’s central bank.
On Tuesday ruling African National Congress (ANC) Secretary General Ace Magashule said the party had agreed to expand the country’s central bank mandate beyond price stability, to include employment and growth.
Hours later an exasperated Mboweni rebuked the idea, saying “nobody” is talking about changing the Reserve Bank’s mandate.
He’s right to be frustrated.
Talk of meddling with the central bank’s mandate, a move most observers agree is a bad idea, dates back to 2017. Despite repeated denials the issue keeps coming up, contributing to concerns about policy direction in Africa’s most advanced economy.
The timing is particularly bad, coming on the back of news that the economy contracted by 3.2% in Q1 of 2019, the most in a decade. It also follows a critical IMF report, and high profile CEO resignations at troubled state-owned power utility Eskom and South African Airways.
All of this is sapping momentum from freshly-elected president Cyril Ramaphosa’s efforts to restore confidence in the economy – already an uphill battle.
Unnecessary confusion about the central bank is the last thing South Africa needs right now.
From The Continent
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