Nedbank CEO Mike Brown has warned that changing the mandate of the Reserve Bank won’t provide a solution to the problems facing the country, urging government to rather focus on implementing growth stimulating policies.
“Leave the Reserve Bank alone,” said Brown.
Last week, ANC Senior Secretary-General, Ace Magashule, stirred debate around the status of the central bank when he announced that the party’s NEC lekgotla had resolved to expand the bank’s mandate to include growth and employment. Magashule’s statement prompted conflicting statements over the issue from ANC and government officials, including President Cyril Ramaphosa.
“Anybody doing any sensible diagnostic on South Africa would know that the Reserve Bank and the Monetary Policy are certainly not the cause of the challenges facing our economy, and certainly not the solution to the challenges facing our economy,” said Brown.
In his address at the annual Nedgroup Investments Treasurer’s Conference in Johannesburg on Wednesday, Brown warned, “Don’t fiddle with something that is not broken.”
He stated that the mandate of the Reserve Bank already included maintaining price stability in the interests of balanced and sustainable economic growth.
Finance Minister Tito Mboweni and the ANC head of economic transformation Enoch Godongwana came out against Magashule’s statement, describing it as not an accurate account of the party’s deliberations or decisions. Ramaphosa came out with the assurance that the mandate of the Reserve Bank “has not changed”.
Land expropriation and economy
Brown also added that the country is in desperate need of investment, and that the expropriation without compensation debate was “taking too long”.
Nedbank was one of the banks that made a presentation to Parliament on the policy’s likely impact on the economy. He argued government should not make Section 25 of the Constitution a scapegoat for poor delivery on land reform.
He urged the government to focus on what he called “low-hanging fruit” as part of growth formula. These include easing travel regulations and improving co-ordination between government departments.
Brown also added his views on the Mining Charter, which he described as a great improvement on previous documents.
“What we should be asking is [whether] the new Mining Charter is likely to encourage a disproportionate share of mining investment coming into South Africa, and as consequence grow jobs, or is the Mining Charter more likely to maintain the status quo?”
The Minerals Council South Africa is challenging the Mining Charter on the basis that the revised document, which was adopted in September 2018, is in breach of an earlier court order, which ruled that previous versions of the regulations didn’t require miners to top up black shareholding levels if they had previously met a minimum 26% requirement.