Ramaphosa puts his foot down amid Reserve Bank spat

President of South Africa, Cyril Ramaphosa addresses a public meeting, where the South African government is returning land lost during Apartheid to the descendants of the original inhabitants of rural areas around Ebenhaeser, on March 23, 2019, in the Western Cape Province, about 350km from Cape Town. - This land restitution is one of the largest to have taken place in the province, with a value of more than R350 000 000(US$25 000 000). Imbalanve of land ownership in South Africa due to colonial and Apartheid policies remains a major point of tension in the country, and will affect the upcoming elections on May 8, 2019. (Photo by RODGER BOSCH / AFP)

President of South Africa, Cyril Ramaphosa addresses a public meeting, where the South African government is returning land lost during Apartheid to the descendants of the original inhabitants of rural areas around Ebenhaeser, on March 23, 2019, in the Western Cape Province, about 350km from Cape Town. - This land restitution is one of the largest to have taken place in the province, with a value of more than R350 000 000(US$25 000 000). Imbalanve of land ownership in South Africa due to colonial and Apartheid policies remains a major point of tension in the country, and will affect the upcoming elections on May 8, 2019. (Photo by RODGER BOSCH / AFP)

The president’s message is clear: there will be one centre of power, the Union Buildings – and not the ANC headquarters, Luthuli House.

With an electoral mandate secured, following the ANC victory in the recent elections, President Cyril Ramaphosa is flexing his political muscles to show he is in charge.

He is not only taking the battle to the “fight-back” faction, loyal to former president Jacob Zuma, but is clear that, in future, there will only be one “centre” of power – and that will be Union Buildings, not the ANC’s Luthuli House headquarters.

The Citizen has been reliably informed Ramaphosa is using the upcoming government lekgotla – and not the recent ANC lekgotla– for help to formulate his State of the Nation address on June 20 and to chart future direction.

This follows the apparent challenge to Ramaphosa by ANC Secretary-General Ace Magashule, claiming the ANC’s national executive committee (NEC) lekgotla had decided the government must expand the SA Reserve Bank (Sarb) mandate to include economic growth and employment.

A top ANC member, who spoke anonymously, said Ramaphosa might ignore the ANC lekgotla – a clear indication that the president was shifting power from Luthuli House to the Union Buildings.

Former president Thabo Mbeki followed the same route.

Ramaphosa has the backing of Finance Minister Tito Mboweni and ANC’s economic transformation sub-committee chairperson, Enoch Godongwana, as well as that of his entire ANC camp, which rejected any interference with the Sarb’s independence.

A senior ANC member said the government lekgotla was the only platform to inform Ramaphosa’s address and nothing else.

The government lekgotla, where the Cabinet and senior officials of all government departments and entities gather to influence policy implementation, usually occurs after the party lekgotla and is regarded as the implementing mechanism of the government, informed by party decisions.

This came as the battle for the control of the party continued between the Nasrec victors aligned to Ramaphosa and the vanquished populists associated with Zuma.

This week, contradictory statements emerged from the two sides about whether the mandate of the Sarb should be expanded.

Magashule said the party lekgotla agreed to expand the Sarb mandate. He said all party deployees were expected to implement the decisions of the ANC 54th national conference – and that included the expansion of the bank’s mandate.

But the moderates, represented by Godongwana and Mboweni, vowed to oppose any attempt to expand that mandate beyond what it was presently. They insisted on a market-driven approach to the economy.

They were supported by strong statements from Reserve Bank governor Lesetja Kganyago, who emphasised the importance of maintaining the independence and impartiality of the central bank.

Godongwana said the ANC lekgotla was not a decision-making body and could not dictate terms to the party or government. He said the matter was debated and closed and no other structure could over-rule the ANC national conference decisions.

Within the ANC, Magashule’s statement was seen as another part of the fight-back by the Zuma camp after they lost power at Nasrec.

“It’s about power dominance; it’s about the control of the economic levers by those that lost at Nasrec,” said the member. “They lost the political power, now they want to gain the economic power, but they don’t understand the economy.

“The government lekgotla is the best platform for Ramaphosa to apply his vision and that is where his true mandate would come from,” he said.

Political analyst Mcebisi Ndletyana said Magashule’s call for the Reserve Bank mandate to be expanded was in line with the ANC conference decision. But the government had a leeway to implement policies in the way it saw fit.

“The government has some flexibility. The government has to look as to whether what it does was in the interest of the country. They might decide to follow a slightly different version,” said Ndletyana.

The ANC was supposed to give a broader guideline, but the government had to carefully weigh whether it was in the interest of the government and the country, he said.

Political analyst Daniel Silke said current economic policy disagreements within the ANC reflected to some degree the existing political factions.

“Ramaphosa has been severely embarrassed by the lekgotla decision on the Reserve Bank,” he said.

Silke criticised the ANC’s contradictory messages. There should be one spokesperson to send a clear and coherent message.

“This is untenable. They can’t go on like this because it is damaging the economy and the image of the country,” said Silke.

ericn@citizen.co.za

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