Economist: Politicians using SARB as a football

By Doug Mattushek - 10 June 2019Views : 298

A leading economist has lambasted South African politicians for using the Reserve Bank in their political game.

The fallout following the ANC’s mixed messages about the mandate of the South African Reserve Bank continues. Dawie Roodt, chief economist at the Efficient Group, hit out at the factions within the leading party.

Last week, in an apparent power play, general secretary Ace Magashule said that the party had decided to change the mandate of SARB.

However, his statements were quickly contradicted by finance minister Tito Mboweni and then President Cyril Ramaphosa himself, among others. But the damage had been done in terms of the economy, according to Roodt.

"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,” Roodt told The Citizen.

"The damage to South Africa is already running into billions, because the rand has depleted significantly relative to other currencies.

"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."