Politics is complicating efforts by South Africa’s central bank to set monetary policy and keep inflation under control, according to Reserve Bank Governor Lesetja Kganyago.
“Our job is already difficult,” Kganyago said in an interview with Bloomberg TV in London. “What the politics does is that it just adds to the complexity.”
Uncertainty has prevailed for more than a year over who will replace President Jacob Zuma as leader of the ruling African National Congress in December. The contest is widely seen as a two-horse race between Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the president’s ex-wife and former chairwoman of the African Union Commission.
The central bank hasn’t been spared in the political infighting that accompanied the succession race, with the nation’s anti-graft ombudsman instructing lawmakers in June to change the constitution to make the bank focus on the “socioeconomic well-being of the citizens” rather than inflation. The High Court has set this order aside, after the central bank sought a review of her directive.
“The problem with the South African discourse on the central bank is that it is based on rhetoric and it is based on populism, rather than looking at the hard facts,” Kganyago said.
“What we didn’t anticipate is that the question about the mandate of the central bank will come from an institution such as the office of the Public Protector. That took us by surprise and we had to push back. We believed what we were saying and what we were doing was simply implementing what the constitution of the Republic of South Africa demands of us.”