Threat to SARB’s independence erodes economic stability

Dear Editor

• Reports of the ANC interfering with the mandate of the SARB are a cause for concern.
• The party has apparently instructed the Finance minister to manage inflation without raising interest rates.
• The SARB’s independence is crucial to ensure that monetary policy serves all of South Africa’s holistic interests, not merely the narrow interests of the ANC.

South Africa faces an escalating cost-of-living crisis as inflation rises and our Rand weakens. This crisis indiscriminately afflicts every South African and the economically vulnerable bear the brunt.

This week, the South African Reserve Bank (SARB) is expected to strategize on monetary policy interventions to mitigate the ANC-inflicted economic crisis.

It is reported that the ANC has directed Finance Minister Enoch Godongwana to ‘instruct’ the SARB to manage inflation without raising interest rates. This unsolicited intervention is a gross breach of the independence that underpins the SARB’s decision-making mandate. The SARB must exercise this constitutional mandate based on independent economic assessments alone and not on the politically expedient whims of the government.

The ANC’s brazen attempt to blame the SARB for its self-induced cost-of-living crisis is transparently disingenuous. It’s not the SARB’s duty to redress the ANC’s fiscal policy failings. The core problem lies in the fact that our economy is not growing. A direct result of the ANC’s failed economic policy.

The governing party’s disgraceful defence of Russia’s illegal invasion of Ukraine alongside its inability to attract foreign capital, promote saving in a high-inflation environment, move beyond race-based policy frameworks, resolve the energy crisis, and cease pouring public funds into moribund state-owned enterprises demonstrates its detachment from and disinterest in the plight of hard-pressed South Africans.

The ANC leadership, including Mr. Mbalula and Minister Godongwana, would do well to look at the damage the ANC’s catastrophic fiscal policy has inflicted on our economy, before shifting the blame to the SARB.

Without substantial deregulation and reform to foster economic activity, South Africa’s economy will remain vulnerable. Inflation will persist, South Africans will become poorer, unemployment will rise, and our economy will not grow.

The SARB’s independence is not only constitutionally decreed but fundamentally crucial to ensure that monetary policy serves all of South Africa’s holistic interests, not merely the narrow interests of any political party. When elected to government in 2024, a DA government will uphold this vital independence and implement fiscally responsible policies to stimulate economic growth, uplift the vulnerable and positioning South Africa competitively on the international stage. It is incumbent upon us to safeguard the autonomy of our institutions and champion policies that truly serve the interests of all South Africans.

Regards

Dr Dion George MP
DA Shadow Minister of Finance