Reserve Bank’s policy independence isn’t untouchable

The South African Communist Party – an alliance partner of the ANC – has criticised those opposed to expanding the mandate of the South African Reserve Bank, in a statement released on Wednesday.

The statement comes after ANC Secretary General Ace Magashule told reporters on Tuesday that the party would follow up on its commitment to expand the Reserve Bank’s mandate.

Hours after, Finance Minister Tito Mboweni and the head of ANC sub-committee on economic transformation Enoch Godongwana denied Magashule’s remarks. Mboweni tweeted that the Reserve Bank still derives its mandate from government, Fin24 reported.

In its statement, the SACP said it reaffirmed its long-standing policy position, that the mandate of the Reserve Bank must explicitly include employment growth targeting and that the Reserve Bank Act should be amended to allow this.

“The policy mandate of Reserve Bank must be dovetailed with the transformation and development mandate of the democratically elected government as backed by the electorate on the ballot – and not the reverse,” the statement read.

Operational vs. policy independence

The SACP contended that while the operational independence of the Reserve Bank should be respected, the Constitution did not recognise policy independence for the SARB.

The Congress of South African Trade Unions (Cosatu)- also a tripartite alliance partner of the ANC – in a separate statement showed support for expanding the mandate of the SARB.

“We remain unwavering in our argument that the SA Reserve Bank cannot afford to continue to only focus on price stability, as pursued through inflation targeting but should consider broader economic development imperatives,” said a statement released by Cosatu.

The Economic Freedom Fighters (EFF) has also issued a statement condemning Mboweni’s statements on the matter. The EFF wants the Reserve Bank to be nationalised and in 2018, tabled the South African Reserve Bank Amendment Bill. 

Meanwhile the SARB has taken to its official Twitter account to align itself with Mboweni – a former Reserve Bank Governor – on the matter.

“Nobody is talking about changing the mandate of the Reserve Bank. It is clearly stipulated in the Constitution,” the account