Godongwana says central bank mandate, as is, can boost jobs

Opponents of Sarb’s policies say it’s focused too much on inflation at the expense of job creation.
Image: Bloomberg

South African Finance Minister Enoch Godongwana said the central bank’s constitutional mandate to maintain price stability is sufficient to foster job creation, suggesting there’s no need for that directive to be expanded.

The head of the governing African National Congress’s economic transformation committee last week raised the prospect of widening the South African Reserve Bank’s mandate to help create more jobs and support transformation in the nation’s financial industry.

Godongwana chaired discussions by the committee about the issue at the ANC’s five-yearly policy conference over the weekend.

“The mandate of the Reserve Bank is defined in the Constitution” to maintain price stability in the interests of economic growth, he said in an interview Sunday. “You can then say in maintaining that stability in the interest of growth, you then must take into account that growth with employment generation, so there is nothing wrong with that.”

Godongwana’s comments are further evidence that President Cyril Ramaphosa, who is expected to stand for a second term as leader of the ANC at an elective conference in December, has managed to keep his economic policy intact despite opposition from within the party. A document seen by Bloomberg showed support for his plans to boost private participation in infrastructure and energy investments.

The mandate of the central bank has been a hot-button issue for the ANC, with opponents of its policies saying it’s focused too much on inflation at the expense of job creation.

South Africa has a 34.5% unemployment rate — the highest on a global list of 82 nations monitored by Bloomberg. The Thomas Piketty-backed World Inequality Lab ranks South Africa as the world’s most unequal nation for which wealth data is available. That’s a legacy of the apartheid system that limited economic opportunities for Black South Africans, who make up about four-fifths of the population, in favor of the country’s White minority.

The head of the ANC’s economic transformation committee, Mmamoloko Kubayi, also raised the prospect of increased engagement between the central bank and the National Treasury on policy matters. Godongwana said he communicates regularly with central bank Governor Lesetja Kganyago.

“I don’t have a problem with writing a letter to Lesetja but I can’t instruct Lesetja, the constitution does not allow me to do so,” Godongwana said. “We meet regularly so I am happy with the interaction.”

Other issues raised for discussion by the committee at the ANC conference included:

  • The introduction of a wealth tax as a possible way to minimize income and wealth inequality in South Africa
  • Feasibility studies into adding new refinery capacity, following the closing of existing facilities
  • The need to ensure that gas and nuclear power are considered as energy sources despite opposition from some critics who favor the sole use of renewable energy.

The issues raised by the committee will be discussed at the ANC’s elective conference in December, when it will appoint officials to lead the party for the next five years.

© 2022 Bloomberg

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This is the last bastion to fall under the ANC looting harvester.
Bang goes the rand !!!!!!!!!!!!!!!!!

Obese people go to the gym in an effort to correct the errors that are made in the kitchen. This results in a fit obese person.

The Reserve Bank cannot correct the errors that are made in the socialist Luthuli House. It will result in a socialist country with worthless currency.

Our economy is taxed to death. Except for the “normal” taxes, the ANC implemented additional redistributive socialist taxes like BEE, cadre deployment, local beneficiation requirements, EE laws, the Mining Charter, municipal rates and taxes, the cost of SOE failures, the legal protection for militant labor unions, the minimum wage, security of tenure laws, and the nationalization of mineral rights.

There is nothing that the Reserve Bank can do about this socialist exercise in stupidity. The voters created their own unemployment. They struggled for the right to be unemployed and poor. They basically stole their own future. Now, they want to steal the purchasing power of the currency.

“The head of the governing African National Congress’s economic transformation committee last week raised the prospect of widening the South African Reserve Bank’s mandate to help create more jobs and support transformation in the nation’s financial industry.”
Now who might that be? A global banker? An international fund manager? A previous lecturer on finance and economics at Harvard?

And “A document seen by Bloomberg showed support for his plans to boost private participation in infrastructure and energy investments.” He has no plans … he has some vague notion of plans, without which SA won’t get the $8.5 billion from the West. Those “plans” are still being dissected by the tenderpreneur clique.

I note that cadre-deployment and corruption were not on the agenda at the all expenses paid hang out.

Is there really no end to their stupidity? Handing the economy over to the ANC was like giving a 12 year old boy and his friends the keys to a new Ferrari with a case of beer in the boot.

End of comments.

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