Let's focus on growing the economy: Tito Mboweni's letter to the nation

06 June 2019 - 10:18 By Group reporters
Tito Mboweni says the SA Reserve Bank must be left alone to pursue its mandate without fear, favour or prejudice.
Tito Mboweni says the SA Reserve Bank must be left alone to pursue its mandate without fear, favour or prejudice.
Image: ESA ALEXANDER

The custodians of SA's economy scrambled on Wednesday to limit the fallout from ANC statements that the finance minister described as reckless and a danger to the country's reputation among investors.

Business Day reports on Thursday that in a barely disguised rebuke of ANC secretary-general Ace Magashule, Tito Mboweni said it was "painful" to see efforts to stabilise the country's finances being undermined, while SA Reserve Bank governor Lesetja Kganyago warned against beating an economy that's already "on its knees".

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Mboweni also penned an open letter which he shared on his Facebook page earlier this week. Here it is, verbatim:

WHAT IS THIS OBSESSION WITH THE SA RESERVE BANK?

1) I am now reaching a point of total exasperation with this continued attacks and obsession with the SA Reserve Bank.

2) I have explained on many occasions the purposes and functions of the SA Reserve Bank. What is the issue? What is the problem you want to solve? You blame the Reserve Bank for everything. Water, unemployment, electricity, growth, ... No people, No.

3) Here is the economic policy architecture:

3.1) The constitution says that the mandate of the SA Reserve Bank is to "protect the value of the currency in the interests of balanced and sustainable growth in the republic".

3.2) Then there is this: the SA Reserve Bank operates independently without fear, favour or prejudice provided that there is regular consultation with the minister of finance. Done.

3.3) Read carefully. The PFMA clarifies the role of the minister of finance and the National Treasury. I quote IN EXTENSO: "Section 5: Establishment: 1) A National Treasury is hereby established, consisting of , a) the minister, who is the head of the (National) Treasury; and ...2) The minister, as the head of the National Treasury, takes the policy and other decisions of the (National) Treasury, except those decisions taken as a result of a delegation or instruction in terms of Section 10".

3.4) Further in the FUNDAMENTALLY critical Section 6, the PFMA says: "FUNCTIONS AND POWERS

1) The National Treasury must

a) promote the national government's fiscal policy framework and the co-ordination of macroeconomic policy

b) co-ordinate inter-governmental financial and fiscal relations"

4) The point that is normally missed in the public conversations is that in LAW, the minister of finance is actually, in terms of section 6 of the PFMA responsible for the co-ordination of macroeconomic policy in the whole government. It is a very serious matter. In fact, correctly put it is the ministry of finance and economic co-ordination by law.

5) NOW THEREFORE,

5.1) Let us leave the SA Reserve Bank alone to pursue its mandate without fear, favour or prejudice,

5.2) Let us focus on micro-economic restructuring to grow the economy,

5.3) Let us stop shouting at business and embrace them as partners in economic growth, investment and job creation,

5.4) Let us embrace ALL farmers, black and white to grow our agriculture. Last year agricultural exports were at about $11bn. Jobs right there.

6) I rest my case.


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