Magashule reportedly to have made changes to ANC statement on the Reserve Bank

It has emerged that the ANC secretary general, Ace Magashule, could have added extra items to the party’s National Executive Committee (NEC) lekgotla statement on the South African Reserve Bank (SARB), sending the rand shaking earlier this week.

Magashule has, however, reportedly denied any suggestions that he possibly made a decision for the NEC lekgotla and reported something to the public that was never a party decision, from last weekend’s meeting.

The Sunday Times reported that Magashule, or those he worked with, probably amended the initial statement prepared for him by the party’s department of information and publicity, inserting some parts on SARB which angered the market. The paper reported that it had seen differences between an initial statement prepared for the secretary general, and the one that was later issued to the media, which had some additions on SARB.

Magashule told reporters the party’s NEC resolved that SARB’s mandate should be expanded.

Ace Magashule

Fin24 previously reported that the announcement affected the rand negatively, raising questions about the country’s fiscal policy and internal squabbles within the ANC. Magashule denied editing and adding any items to the initial statement. “I read the statement as is. I have not seen any other statement,” he told the Sunday Times.

In his statement, he said the NEC made a decision on expanding SARB’s mandate, as well as starting a process to instruct the bank to consider quantitative easing – printing money – as a means of alleviating pressure on government.

Enormous outcry

His statement read: “It was agreed that all deployees will ensure that resolutions of the 54th National Conference will be fully implemented, in this regard, the ANC NEC Lekgotla agreed to expand the mandate of the South African Reserve Bank beyond price stability to include growth and employment. It also directed the ANC government to consider constituting a task team to explore quantity easing measures to address intergovernmental debts to make funds available for developmental purposes.”

He also tweeted the same statement, triggering an enormous outcry, with Finance Minister Tito Mboweni and Enoch Godongwana, chairperson of the party’s economic transformation committee, leading the charge against Magashule.

Mboweni first took to Twitter and followed it up with a Facebook post, all before 23:00 on Tuesday night.

And Godongwana, clearly exasperated with the turn of events, and the effect on the market and investors’ confidence, issued a statement saying Magashule’s recollection of what transpired at the NEC was wrong:

Magashule report

On Wednesday, SARB governor Lesetja Kganyago entered the fray, and appearing alongside Mboweni at an event at Constitution Hill, said the issue was a “non-discussion” and a “Trojan horse”.

He went even further that evening, declaring that there are “barbarians at the gate” of the central bank.

“Institutions have been systematically weakened and gutted – key institutions in law enforcement. Quality institutions matter. [The Constitution] created institutions and tasked them [to undertake] various democratic processes,” he said.

However, not everyone was condemning Magashule, in what suggests friction between the reformist grouping in the ANC, led by President Cyril Ramaphosa, and those in opposition, led and personified by Magashule, erupting into a very public conflict.

Public spat

Magashule had strong support from Ekurhuleni Mayor Mzwandile Masina, and Tony Yengeni, ANC NEC member and convicted fraudster, who attacked Mboweni (without naming him). Yengeni was also active on Twitter.

Party leader Ramaphosa’s office had on Thursday released a statement, with the president making his stand clear, and going as far as he could in rebuking Magashule.

The statement, in Ramaphosa’s name with Zizi Kodwa as contact person (and not the party’s spokesperson, Pule Mabe) sought to reassure investors and calm markets, saying that the mandate of SARB has not changed and that it is not feasible to buy out private shareholders in the bank.

“The officials emphasised the policy positions of the ANC on the independence and role of the SARB as set out in the Constitution of the Republic of South Africa [which is] protecting ‘the value of the currency in the interest of balanced and sustainable economic growth’.

“It further states that this mandate must be exercised in regular consultation with government through the cabinet minister responsible for national financial matters. This policy has not changed,” Ramaphosa said.

He added that “recent public spats” – a direct reference to Magashule’s statements and the reaction to it – were “not being helpful” and were undermining the confidence of the public and investors.

The public spat seemed to intensify when, minutes after Ramaphosa issued the statement, Magashule tweeted that the party’s NEC lekgotla had resolved to expand the mandate beyond price stability, to include employment and growth.

The tweet from his account, which News24 took a screengrab of before it was taken down, has since been branded as “fake” by Magashule.

The Sunday Times reported that there were proposals to revamp the way the party communicates key decisions in the future.

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Source: News24

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