The world probably thinks we’ve gone mad, warns economist

The continued bickering within the governing party surrounding the nationalisation of the country’s central bank has international investors wondering if the country’s leaders have “gone mad” and whether the correct people are in charge, according to a leading economist.

ANC top leaders had the country confused last week, with contradictory remarks on the expansion of the South African Reserve Bank’s mandate.

While ANC secretary-general Ace Magashule said the Reserve Bank should change its mandate, Finance Minister Tito Mboweni on social media disputed and corrected such claims. President Cyril Ramaphosa’s office, meanwhile, had to release a statement on Thursday to clarify the president’s stance and to rebuke Magashule.

But the conflict between the ANC top brass is causing “immense damage” to South Africa and its reputation, as the Reserve Bank is being used as a political football, economist Dawie Roodt told The Citizen yesterday.

“I am not sure what the political game is here but it is obviously the Cyril Ramaphosa camp versus the Ace Magashule camp, which are simply using the Reserve Bank as a football and a toy to score political points. The damage to South Africa is already running into billions, because the rand has depleted significantly relative to other currencies,” Roodt said.

Contradictions between Magashule and the finance minister on changing the bank’s mandate could be sending a false message to the financial market. But there was clear ideological and leadership conflict in the ANC, Roodt said.

“We don’t know the ANC’s real ideology. Whether it is a neoliberal or communist organisation, for example, because Mboweni is saying one thing, Magashule another and Ramaphosa is saying something else. There is also leadership conflict.

“International investors and international journalists often ask me if we are going mad because it seems like we are. This is a power play … Changing the Reserve Bank mandate is not important. What is important is the message behind that – which is that incompetence is in charge – and that is what the financial market is concerned about.”

– rorisangk@citizen.co.za

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