South Africa: Out of the Bottle - the Monetary Policy Genie (Or Not?)

Left: ANC Secretary General Ace Magashule. RIght: Finance Minister Tito Mboweni.

The ANC, newly invigorated after the elections, has put altering the mandate of the South African Reserve Bank at the centre of its developmental agenda and has touted exploring quantitative easing as a solution to SA's many woes.

A statement released by the ANC secretary-general Ace Magashule sets out the government's "five-year programme to translate the ANC's contract with the people of South Africa into action" and signals a sharp jump to the left. However, hours after its release, Finance Minister Tito Mboweni denied there was an agreement to alter the mandate of the Reserve Bank.

The National Executive Committee of the ANC met in its annual Lekgotla over the weekend of 1-3 June 2019 to chart the way forward for South Africa and its people.

It would not have been a relaxed meeting. The ANC is under pressure to act. First quarter GDP figures released on 4 June reflected the biggest quarterly drop in GDP growth since 2009 (-3.2%) and the lowest yearly growth rate since the beginning of 2016, when the full follow-on impact of Nene-gate was felt.

Unemployment is at its worst level yet. Parastatal debt at Eskom, SAA and others is nearing R700-billion, and debt repayments...

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